What is a COVID Working Capital Loan?
What’s the Difference Between a Start-up and Growth Loan and a COVID Working Capital Loan?
The COVID Working Capital Loan is available to businesses until 31st December 2021.
The loan is available to existing businesses that were viable as at 31st December 2019 and have been financially impacted by the COVID-19 pandemic. Issued by Business Loans Scotland (BLS), under the Scottish Growth Scheme, it aims to provide Scottish based small and medium sized businesses (SMEs) with a loan to help fund working capital and cashflow needs. This loan is available in addition to other Government grant and loan schemes.
Loans are offered at 6% interest, fixed for the term of the loan and can be repaid over a period of up to 5 years. There are no additional charges or early repayment fees and a Loan Officer will provide you with support throughout the application process.
Can I Apply for a COVID Working Capital Loan if I Already Have a Start-up and Growth Loan?
The existing Start-up and Growth Loan available from BLS, under the Scottish Growth Scheme, will continue to support Scottish based SMEs with funding to start-up or grow. These loans can be used for various purposes including, but not limited to, purchasing new or used plant or equipment, buying or renovating business premises, introducing new product lines or recruiting new employees.
The COVID Working Capital Loan has been introduced and designed in response to the COVID-19 pandemic. This loan differs as it will support businesses which have been financially impacted by the COVID-19 pandemic and need to raise working capital to help their business survive during these extremely challenging times.
Businesses must be able to prove they were NOT in financial difficulty, were financially viable at 31st December 2019 and demonstrate with the support of a COVID Working Capital Loan that they can trade through this pandemic.
All borrowers will be given an initial 3-month capital moratorium. Security will be taken where it is available.
Please note that businesses should have tried to access the Coronavirus Business Interruption Loan Scheme (CBILS) or Bounce Back Loan Scheme (BBLS) available from the UK Government before applying to Business Loans Scotland for a COVID Working Capital Loan.
Current or previous borrowers from Business Loans Scotland, as well as those businesses which have successfully applied to the Coronavirus Business Interruption Loan Scheme (CBILS) or the Bounce Back Loan Scheme (BBLS) are also eligible to apply.
Am I Eligible?
The answer is, yes.
If you are a current borrower from Business Loans Scotland and have one of our Start-up and Growth loans then you can still apply for a COVID Working Capital Loan.
We can support the following types of legally formed and trading businesses:
- Limited Companies
- Partnerships including Limited Liability Partnerships (LLP’s) with 4 or more partners
- Partnerships including Limited Liability Partnerships with 3 or fewer partners (Loans over £25,000 only)
- Sole Trader (Loans over £25,000 only)
Our primary focus is on businesses engaged in the Business to Business (B2B) and Business to Consumer (B2C) categories.
Click below for a breakdown of eligible sectors. Eligible Sectors
Business Credit Check
All of the documents that we need to consider your loan application are uploaded into our Online Loan Application system (OLA). You should have the relevant documents prepared in digital format before you start your application. OLA will accept Word, Excel and PDF formats.
The maximum file size is 5MB, so please ensure your files are less than 5MB, otherwise you will need to split your document.
Click below to see a full list of required information. Documentation
Calculate Your Repayments
All businesses submitting loan applications to Business Loans Scotland will be “credit checked” using an external credit checking agency. Business Loans Scotland currently uses the credit checking service provided by Experian although this may change from time to time.
The business credit check will provide an assessment on the risk and rating of the business as well as detail the shareholders and directors of the business.
Work out your monthly repayment by using our loan calculator. Our loan is offered at a fixed interest rate meaning the interest rate doesn't fluctuate during the period of the loan. This allows you to accurately budget for future loan repayments.