How customer lists and trademarks help companies borrow

11 hours ago

Intangible assets now comprise 92% of S&P 500 company value, up from 17% in 1975, shifting borrowing dynamics.
Intangible assets like brands and customer lists support debt through cash flow-based borrowing, unlike tangible assets which serve as collateral.
Acquisitions show each dollar of intangible assets increases long-term debt by 24 cents, while tangible assets increase it by 44 cents.
Demand-shifter intangibles (e.g., brands, customer lists) boost debt by 45 cents per dollar, more than production-based intangibles (15 cents) due to cash flow stability.
Legal frameworks like Chapter 11 reorganization are crucial for intangible-intensive companies to borrow by preserving going-concern value during distress.
A court ruling making restructuring less reliable reduced borrowing ability for intangible-rich companies, highlighting policy needs for modern economies.

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