October has a sense of déjà vu about it as we enter school half terms with rolling “circuit breakers” around the country shutting down our beloved pubs and restaurants again, just as normality seemed to be returning.
On the R&D tax credit lending side of things, we have had a fairly quiet few months as HMRC’s repayment times have dropped to their target 28 day turnaround time for the first time in who knows how long - perhaps ever?
But, as they say, when God closes a door he opens a window and we have done some interesting deals in areas which have benefitted from Coronavirus-related changes. We provided several loans against Video Games Tax Relief (VGTR) tax credits as game development studios continued to churn out games as quickly as possible to keep thumbs from being idle in lockdown. Those loans enable developers to raise capital to complete a game while maximising their exposure to the game’s success.
Elsewhere, we have made a significant loan to a UK biotechnology company in order to facilitate the expansion of their Covid-19 testing facilities in the UK and Jersey. It is a testament to the ingenuity and practicality of scientists that they have been able to set up reliable and cost-efficient testing so quickly using the highest quality machinery and adapted shipping containers for transportability.
Finally we have provided a term loan facility to a parcel delivery aggregator, which has seen a huge increase in customer numbers as a result of Coronavirus as people look for a means to send parcels cheaply and reliably without taking unnecessary risks of catching the virus at the Post Office. It is our conviction that even when the risk of Coronavirus has dissipated, people will continue to use this brilliant service and that sadly it will be the Royal Mail, with its large property portfolio, which suffers.
The main challenge for us has been to get sufficient comfort on deals without being able to meet borrowers, advisers or even colleagues in person. While video calls have made things easier, they are no panacea and we are very much looking forward to being able to have face-to-face interactions again.