KfW Report Highlights Use of Patents and Trademarks as Collateral in SMEs, With Potential for Growth in Germany

KfW Report Highlights Use of Patents and Trademarks as Collateral in SMEs, With Potential for Growth in Germany

(IN BRIEF) A moderate percentage of small and medium-sized enterprises (SMEs) in Germany own patents or trademark rights, with 9% holding trademarks and 3% owning patents. Patents are more common in larger, R&D-focused, or internationally operating companies, while trademarks are more widely distributed, even among small businesses. Despite this, SMEs in Germany are less likely to use intangible assets as loan collateral, a practice already established in countries like France, Sweden, and the Netherlands. There is a growing recognition in Germany of the importance of intangible assets, with many SMEs reporting that insufficient collateral is a barrier to securing financing.

(PRESS RELEASE) FRANKFURT, 13-May-2025 — /EuropaWire/ — In Germany, a relatively small proportion of small and medium-sized enterprises (SMEs) hold patents or trademark rights. According to the KfW SME Panel, 9% of SMEs own trademark rights, while only 3% possess patents—equating to around 350,000 businesses with trademarks and 100,000 with patents. This means that nearly 400,000 of the 3.84 million SMEs in Germany are able to leverage these intangible assets, though some businesses overlap in having both trademarks and patents.

However, patent ownership is predominantly found in larger SMEs, particularly those with 50 or more employees, those engaged in research and development (R&D), and those in manufacturing sectors. Furthermore, businesses that operate internationally are more than three times as likely to own patents compared to those focused solely on the German market. Dr. Dirk Schumacher, Chief Economist at KfW, emphasized, “International markets are highly competitive. Businesses with global operations must take additional measures to protect their innovations.”

While trademark rights are more widely distributed, large SMEs and R&D-intensive manufacturing companies again lead the pack. Even so, 7% of small businesses with fewer than five employees also possess trademarks, though only 2% own patents.

Businesses focused only on regional markets are less likely to prioritize trademarks compared to those with a national or international footprint. This is because building brand recognition through registered trademarks becomes more critical when businesses are unable to engage in direct, personal interactions with customers. Dr. Dirk Schumacher noted, “Larger businesses are better equipped to handle the financial burden of legal disputes related to patent claims or the costs associated with building a brand reputation. They also benefit from more resources, such as specialized staff.”

In countries like France, Sweden, and the Netherlands, intangible assets such as patents and trademarks are commonly used as credit collateral with banks, positively influencing businesses’ ability to secure loans. This practice is not yet widespread in Germany, but the importance of intangible assets is growing in the SME sector. According to the KfW SME Panel, 23% of SMEs in Germany report that their inability to provide the necessary collateral is a key reason for failed loan negotiations. “It would be beneficial to explore the possibility of allowing patents and trademark rights to serve as collateral in bank loans in Germany in the medium to long term,” said Dr. Schumacher.

Media Contact:

Nina Luttmer
+49 69 7431 41336
nina.luttmer@kfw.de

SOURCE: KfW Entwicklungsbank GmbH