Asset-based borrowing is becoming an increasingly popular way for firms to raise funds during the credit crunch. Last month, for example, HSBC Commercial Bank launched an asset-based lending division in the UK. The bank explained that this would give businesses the chance to borrow on the strength of their balance sheets and stock, including machinery, plant and commercial property.

But some companies are also borrowing against their intangible assets. Earlier this year Burn Stewart Distillers, which produces premium single malts such as Tobermory and Deanston, refinanced with KBC Business Capital. Its £31m package was linked to the values of assets including brands, inventories, accounts receivables and distilleries.

It was intended to increase the firm’s flexibility and to restructure its existing debt. “We have put in place a banking structure with sufficient flexibility to support our growth aspirations,” says Fraser Thornton, managing director at Burn Stewart. Paul Hooper, sales director at KBC Business Capital, adds that using a combination of tangible and intangible assets will allow Burn Stewart to find a funding structure that is more appropriate for the industry than those available using more traditional financing methods.

The integrated valuation of both tangible and intangible assets was performed by a new partnership launched in April between Intangible Business and hard-asset valuation consultancy GoIndustry.