The Royal Bank of Scotland (RBS) has announced plans to launch Intellectual Property (IP)-backed loans for high growth businesses in Scotland.

The move will give businesses access to funding using the value of their IP instead of physical assets when conventional lending is unsuitable.

The company said that the loans will fuel growth and innovation in Scotland.

It follows a change in Scottish law earlier this year, with the Moveable Transactions (Scotland) Act 2023 taking affect. The legislation gives lenders the ability to accept effective security over IP rights.

RBS said that from next year, loans ranging from £250,000 up to £10 million will be granted to high-growth Scottish businesses which, because of their lack of fixed assets, often find it difficult to secure funding to drive their growth.

NatWest Group, the parent company of RBS, launched IP-backed loans in 2024 under its NatWest brand. Since then, it has agreed to lend high growth businesses in England and Wales in excess of £22 million using IP-backed loans.

These include companies specialising in cloud-based software services, smart system technology, state of the art engineering and AI gaming platforms.

One company benefitting from the scheme is Bristol-based prosthetics firm Open Bionics, which harnesses “cutting-edge” 3D printing and scanning technology to design and build affordable, custom-built bionic arms.

The company secured a £600,000 IP-backed loan to open six new clinics in the US, helping more patients to access its life-changing Hero Arm.

RBS said the new IP-backed loan offering has great potential for providing a boost to the interactive entertainment sector in Dundee, which is renowned for its thriving gaming industry, and many other health tech, life sciences, and robotics businesses across Scotland.

NatWest Group’s new Business Growth and Innovation Hotspots index has identified Edinburgh and Glasgow in the top 10 leading areas, and Aberdeen in the top 25, for mid-market activity in the UK driven mainly by tech and innovation companies.

According to the company’s research, Scotland’s climate tech sector employs 30,000 people and generates more than £15 billion each year, with Edinburgh leading the way for this sector whilst Glasgow is noted for a high concentration of fintech businesses.

“This new loan demonstrates how we are supporting innovation and businesses who are seeking investment home and abroad, whatever stage they are at in their lifecycle,” said Judith Cruickshank, NatWest Group’s Scotland board chair. “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.”

The IP-backed loan has been specifically designed in partnership with IP valuation company Inngot.

The company’s IP identification and valuation tools facilitate the ongoing delivery of the loan proposition.

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