Scottish Loan Scheme

Loans for working capital, capital expenditure, growth funding, expansion in international markets and marketing investment.

What is the Scottish Loan Scheme?

The Scottish Loan Scheme can provide loan funding of £250,000 to £2 million (and up to £5 million in exceptional circumstances) to growth focused Scottish companies that have a viable business plan and a clear ability to repay the debt.

Loans can be used for a variety of purposes, including:

  • Working capital
  • Capital expenditure
  • Growth funding
  • International expansion
  • Marketing investment

Am I eligible?

To be eligible for investment from the Scottish Loan Scheme:

  • Your business must be based in Scotland or ready to locate to Scotland (and located in Scotland before any loan funds are made available)
  • You must have a viable business plan which demonstrates you can pay back the loan
  • You must demonstrate that you have tried to get funding from existing funders or there is justifiable reason why you have not
  • Your company is at least two years' old with minimum £250k turnover and be profitable (or projecting profitability within the next 12 months)
  • The loan funding needs to secure or maintain economic impact in Scotland commensurate with the level of funding being sought
  • Your business must support fair work practices, including paying support the Living Wage, with no inappropriate use of zero hours contracts or exploitative working patterns
  • Restricted sectors include banking and insurance and sub-prime lending, gambling, adult entertainment, activities with adverse impact on human rights, tobacco and locally traded services

Terms and conditions

Features

Loan amounts

£250,000 - £2,000,000 (and up to £5,000,000 in exceptional circumstances)

Term

Typically, 1 – 7 years

Interest

The rate of interest will be determined by assessment of risk and available security

Repayment profile

Monthly or Quarterly capital & interest repayments

Holidays

Interest – up to 6 months at start of loan term

Capital – up to 12 months at start of loan

Both subject to Scottish Enterprise discretion

Security

Typically, Bond & Floating Charge. No requirement for personal guarantees

Fees

1% arrangement fee. External diligence and legal costs borne by company

Other features

Companies may request two months deferral of payments within a rolling 24-month period during the duration of the loan. Deferred payments will be repaid as a bullet repayment at the end of the loan term and is subject to Scottish Enterprise’s discretion.

Companies may request to ‘reborrow’ up to 20% of loan capital that has been repaid to Scottish Enterprise under the loan (provided at least 50% of the original capital has been repaid). This additional loan funding will be repaid under the existing terms of the loan.

Only one application is permitted and is subject to Scottish Enterprise’s discretion.

How to apply

Submit an enquiry

We'll then ask you to complete an initial enquiry form to allow us to assess whether the qualifying criteria has been met and whether we wish to progress with your application.

Qualifying companies will then be required to submit the following:

  • Full application form
  • Business plan
  • Two years of historical annual accounts
  • Three years of forecasts (to include P&L, balance sheet and cashflow forecasts)
  • Details of current borrowing

The business plan and financial forecasts need to clearly demonstrate the company is viable and able to repay the debt within sufficient headroom.

Loan applications will be subject to credit checks of directors and shareholders with over 20% shareholding.

Any existing debt will be taken into account when assessing loan affordability.

If your loan is approved, on an ongoing basis, you'll need to provide us with management accounts (P&L, balance sheet and cashflow), annual budgets and annual accounts.

In addition, high-level information on economic impact derived from the funding will be required.

Contact our team to find out more

We're on hand to answer your questions and explain the support the Scottish Investment Bank can offer to help your business succeed.

Scottish Government gov.scot

Scottish Government

Scottish Growth Scheme

Scottish Growth Scheme