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Ministers have welcomed plans by Royal Bank of Scotland (RBS) for a new type of loan for high-development businesses, saying that it will help in “kickstart” trade innovation in Scotland.
From next year, Scottish firms will be able to borrow against the value of their intellectual property (IP) rather than traditional property such as buildings and machinery.
This will see businesses in areas including gaming and health technology capable of borrowing from £ 250,000 to £ 10 million – something that is often difficult due to lack of tangible property in the past.
The move has been made possible by changes in the Scottish law that came into force earlier this year, giving the lenders the ability to accept the IP as security for loans.
Judith Kricashank is the chairman of the Scotland Board RBS Parents NutWest Group.
He said the new loan has shown that the bank was “supporting innovation and businesses who are demanding investment at home and abroad, whatever they are in their life cycle”.
She said: “As more companies invest in AI and digital capabilities, we expect to look at the increased demand for technology-managed services, which may not have more tangible assets as more traditional businesses.
“Our IP-supported loan offering is an important example of how Natwest is supporting the digital economy of Scotland, helps the IP-rich firms to accelerate investment and provide development facilities without reducing ownership.”
The Natwest Group launched an IP-supported loan to the south of the border in 2024, and said that more than £ 22 million was already given loans for high-development businesses.
These include Bristol-based prosthetics firm Open Bayonics, which secured £ 600,000 for opening six new clinics in the US and secured Liverpool Gaming Company Repstone, which achieved £ 600,000 to develop a new range of gaming projects.
RBS stated that the new loan had “great ability” to promote industries in Scotland, such as gaming, health technology, life science, fintech, green technology and robotics.
The decision to provide loans in Scotland has been welcomed by ministers with Scottish Secretary Douglas Alexander Saying that it will help remove “traditional obstacles for finance” for innovative companies.
“This is a welcome news from RBS that will widen the market that helps new companies unlock the extraordinary ability of Scotland in technology and life science,” he said.
“To enable Scottish businesses to take advantage of their intellectual property, can remove traditional obstacles as collateral that have withdrawn some of our most new companies.
“This new funding source can help scale these IP-rich businesses and compete on the global platform.”
This was echoed by Deputy Minister Kate Forbes, who said that the loan would help in the “Kickstart” trade innovation in Scotland.
“Scotland has an incredibly strong track record of invention and innovation and it must have a shared effort to start and support our business founders,” he said.
“Access to capital, of course, is fundamental to the development of businesses and Scottish government The new law brought forward in 2023, so that businesses are able to use their IP, the way they use physical assets.
“It is welcome and exciting to see the plans of the Royal Bank of Scotland for IP-supported loans and I look forward to providing invaluable support to help it kickstart the country’s greatest ideas and business innovations.”
Martin Brasel, Chief Executive Officer of Ingott, who provides equipment for IP of businesses, said that he was “happy” Scottish companies would be able to benefit from debt.
“IP has been called ‘currency of knowledge economy’ – this is important,” he said.
“However, for a currency, it is not very liquid in the past.
“This initiative improves liquidity by enabling businesses to borrow cost-effectively against the value of those abstract assets, and funds the manufacture of new people to promote growth and competition.”
The news was announced on 6-7 October as global leaders and experts of RBS at the Scottish Global Investment Summit at its Edinburgh Gogburn headquarters.
The aim of the annual summit aims to connect international investors with future investment opportunities, and recognize the country’s historical achievements.