Creative technology companies hold most of their worth in code, models, data and communities—assets traditional lenders don’t know how to accept or price. That mismatch drives denials and pushes founders toward alternative capital.
Intangible assets—code, trained models, data, brands and contracts—now represent the bulk of value in many creative tech firms, but banks still prioritise physical collateral.
Banks reject many loans because collateral can’t be seized, valuation of intangibles is uncertain, and recurring revenues are perceived as volatile or policy-risky.
When banks won’t lend, funding moves to venture capital (concentrated in a few winners) and revenue-based financing, which aligns payments with recurring income.
The mismatch between modern creative technology businesses and traditional lending is visible in routine loan denials. A software studio with millions of users can still be turned away because a bank's lending playbook expects warehouses, machinery and vehicles. Creative tech businesses—game studios, animation houses, AI roleplay and interactive storytelling platforms—own value that can't be physically seized: trained model weights, content libraries, user communities, brands and licensing agreements.
Collateral remains central. Traditional bank lending assumes a default can be remedied by seizing and selling assets. That assumption works for businesses with tangible inventory and equipment. It fails where the primary assets are a community of users or a fine-tuned model: if the business shutters, the audience and the value tied to it often disappear.
When banks won't provide capital, founders turn to other sources.
How founders can improve their funding odds
The creative technology sector is growing fast, but the capital system hasn't caught up. Banks still require forecloseable collateral and conservative valuations. Founders should document recurring income and contractual cash flows and consider alternative capital that prices upside or revenue instead of physical assets. Those steps don't eliminate risk, but they make intangible-heavy businesses legible to the kinds of lenders willing to finance them.
Across the region, governments want banks to remain conservative and startups to become more ambitious. Those goals are compatible only when other institutions are prepared to finance the risks that banks cannot. Conventional lenders reward collateral, reliable cash flow and years of financial statements. Many companie
As Open Banking and Smart Data expand what's visible about a business, many SMEs are still assessed by instruments built to read the past, writes Grace Almendras-Castillo, founder and chief executive officer of Gifftid. Source
Featuring Holly Fraser, Editor-in-Chief of WePresent, VP of Content, WeTransfer; Jason Schupbach, President, Fashion Institute of Technology and Everette Taylor, CEO, Kickstarter Moderated by Kc Ifeanyi, Executive Director of Editorial Programming, Fast Company AI and advanced technology are attracting unprecedented in
In what ways must banks identify the highest-impact AI use cases across underwriting, workflow automation, risk monitoring and servicing?
Stakeholders in Tanzania's creative industry have called for the major overhaul of the systems governing access to finance, insurance, intellectual property protection and taxation to support sector’s into sustainable businesses and jobs. The call was made at the MELACHA Creative Economy Summit 2026, held in Dar es Sal
Congress and the courts have spent two decades treating patents as active weapons in an ongoing commercial fight. That framing misses what patents actually are to most of the people who own them: inheritable property. Twenty-year terms outlast careers. Portfolios pass to spouses, children, foundations, and trusts. Lice
Loading more related stories...
Open the app view to save this story, compare related coverage, and continue from the same source.