According to BoCom's IPR mortgage regulations, enterprises with good credit, and with total assets of no more than 40 million yuan and annual sales of no more than 30 million yuan could use the patents, utility patents or profitable trademark they own as guarantees to apply for the loan. Each company is allowed to ask for a maximum of 10 million yuan with a maturity of three years.

As of the end of last year, more than 300 IPR mortgage contracts involving more than 700 patents with a total value of 6 billion yuan were registered in the State Intellectual Property Office.

Although the business has a rosy picture for further development, it still has risks as IPRs are not as stable as tangible assets, people related to the business say.

"Besides the risks existing in common bank loans, IPR mortgage loans also face legal risks," says Zhang.

"As the law concerning IPR is not comprehensive in China, there are many uncertainties regarding the ownership and owners' interests on the patent rights, " he adds.

To control the risks in IPR loans, BoCom adopted a credit model by partnering with independent rating institutions and law firms for comprehensive assessments and legal advice.

Liu Wutang, director of Beijing-based Liancheng Assets Evaluation Co, which works with BoCom, says evaluating of patent rights is crucial for a successful loan.

"Because factors like technological innovation may affect the value of IPRs rights as time goes by, its risk are more unpredictable than other common assets," Liu tells China Business Weekly.