PEER-TO-PEER business lender ArchOver is expanding into research and development (R&D) advance loans.
Businesses that can show they are claiming R&D tax credits from HMRC will be able to secure a loan against this commitment.
The loans will aim to fill the gap for companies waiting for the R&D payments to come through.
Borrowers will pay rates from 12 per cent and lenders will receive interest from 10 per cent per year.
The government has set aside approximately £1.5bn per year for companies they deem to be undertaking qualifying R&D activities and eligible firms can claim cash repayments of up to 33 per cent of R&D expenditure.
The claims are made with a company’s tax return and can be done up to two years in arrears.
It can take up to six months for a company making a claim to receive payment from HMRC so ArchOver says it is helping companies to bridge this gap.
“The R&D Advance lending service is available only to companies that can demonstrate a history of successfully claiming R&D tax credits from HMRC with at least two years of successful claims being made,” ArchOver said in a note to investors.
“The company must also have retained professional advisers to help in the preparation of the R&D tax credit claim. When making the claim, the company seeking the advance must advise HMRC to pay all the funds claimed to an ArchOver controlled bank account.”
Read more: Making the most of your money