Ministers welcome new loans that will ‘kickstart’ business innovation

Ministers have welcomed plans by the Royal Bank of Scotland (RBS) for a new type of loan for high-growth businesses, saying it will help “kickstart” business innovation in Scotland.

From next year, Scottish firms will be able to secure borrowing against the value of their intellectual property (IP), instead of traditional assets such as buildings and machinery.

This will see businesses in areas including gaming and health technology able to borrow sums ranging from £250,000 to £10 million – something that has often been difficult in the past because of their lack of tangible assets.

The move has been made possible by a change in Scottish law which came into effect earlier this year, giving lenders the ability to accept IP as security for loans.

Judith Cruickshank is Scotland board chairwoman of RBS parent NatWest Group.

She said the new loan showed the bank was “supporting innovation and businesses who are seeking investment at home and abroad, whatever stage they are at in their lifecycle”.

She said: “As more companies invest in AI and digital capabilities, we expect to see an increased demand for technology-driven services which may not have the same tangible assets as more traditional businesses.

“Our IP-backed loan offering is a key example of how NatWest is supporting Scotland’s digital economy, helping IP-rich firms to accelerate investment and facilitate growth without diluting ownership.”

NatWest Group launched IP-backed loans south of the border in 2024, and said more than £22 million had already been loaned to high-growth businesses.

These include Bristol-based prosthetics firm Open Bionics, which secured £600,000 to open six new clinics in the US, and Liverpool gaming company Ripstone, which secured £600,000 to develop a new range of gaming projects.

RBS said the new loan had “great potential” for boosting industries across Scotland, in areas such as gaming, health technology, life sciences, fintech, green technology and robotics.

The decision to make the loans available in Scotland has been welcomed by ministers, with Scottish Secretary Douglas Alexander saying it will help remove “traditional barriers to finance” for innovative companies.

“This is welcome news from RBS that will widen the market that helps innovative companies unlock Scotland’s extraordinary potential in technology and life sciences,” he said.

“Enabling Scottish businesses to leverage their intellectual property as collateral can remove the traditional barriers to finance which have held back some of our most innovative companies.

“This new funding source could help these IP-rich businesses scale up and compete on the global stage.”

This was echoed by deputy First Minister Kate Forbes, who said the loans would help “kickstart” business innovation in Scotland.

“Scotland has an incredibly strong track record of invention and innovation and it must be a shared endeavour to support our business founders start and scale up,” she said.

“Access to capital is, of course, fundamental to businesses growth and the Scottish Government brought forward new legislation in 2023 to enable businesses to use their IP to raise finance in the same way as they use physical assets.

“It is welcome and exciting to see the Royal Bank of Scotland’s plans for an IP-backed loan and I look forward to it providing invaluable support to help kickstart the country’s greatest ideas and business innovation.”

Martin Brassell, chief executive of Inngot, which provides tools for valuing businesses’ IP, said he was “delighted” Scottish companies will be able to benefit from the loans.

“IP has been called the ‘currency of the knowledge economy’ – it’s that important,” he said.

“However, for a currency, it’s not been very liquid in the past.

“This initiative improves liquidity by enabling businesses to borrow cost-effectively against the value of the intangible assets they own, and fund their creation of new ones to boost growth and competitiveness.”

The news was announced as RBS hosts global leaders and experts at the Scottish Global Investment Summit at its Edinburgh Gogaburn headquarters on October 6-7.

The annual summit aims to connect international investors with future investment opportunities, and recognises the country’s historical achievements.