Companies finding it hard to continue research and development because of Covid-19 can now apply for an R&D loan of up to $400,000 from Crown agency Callaghan Innovation.

The loans will be charged at 3 per cent interest, but with interest waived if the full amount is repaid within a year.

On June 5, the Government announced $150 million for an R&D loan scheme, as part of a broader $400m package to secure or create jobs - but the fine details, including loan amounts and eligibility criteria, have only just been hammered out.

Callaghan Innovation is the sole agency for the R&D loan scheme.

Advertisement

The agency is promising fast turnaround for firms who meet the loan criteria, with the first payouts in mid-July.

"It looks like an excellent initiative. I'm recommending all Covid-19 affected companies with R&D spend consider it," Punakaiki Fund founder Lance Wiggs told the Herald.

"It's very cheap money."

To qualify, a company must be solvent, registered in New Zealand, and have spent at least $50,000 on R&D in the year to March 26, 2020.

Applicants are required to supply detailed information about their pre-pandemic R&D plans for 2021.

The loans are not available to Crown Research Institutes, SOEs, councils or any company 50 per cent or more owned by the Crown.

Firms will be paid the lower of their projected eligible R&D spend minus other forms of government R&D funding or $400,000.

Firms eligible R&D spend will automatically be chipped down to 85 per cent on the assumption that they are eligible for the recently-introduced R&D tax rebate, officially known as the RDTI (Research and Development Tax Incentive).

Advertisement
Punakaiki Fund founder Lance Wiggs. Photo / File
Punakaiki Fund founder Lance Wiggs. Photo / File

The universal R&D tax rebate replaced one of Callaghan Innovation's core functions - its Growth Grants to supplement R&D spending for select companies. Callaghan continues to award smaller Project Grants, and offers R&D services to support the private sector.

The R&D loan scheme follows the government's introduction of loans of up to $100,000 for firms under 50 on May 1.