Eligibility

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 (LLP’s) with 3 or fewer partners (loans over £25,000 only)
  • Sole Traders (loans over £25,000 only)
  • Businesses may operate as a Social Enterprise or Co-operative

Our primary focus is on businesses engaged in the Business to Business (B2B) and Business to Consumer (B2C) categories.

Loans may be used for

  • working capital
  • purchase of plant and equipment
  • purchase of business property

Applicant businesses should demonstrate that they have explored all available funding options including personal funds and borrowings, bank funding (including factoring and asset finance) and the potential for equity from venture capitalists. Any business approaching Business Loans Scotland will receive support and advice from Business Gateway and local authority business support teams to help them reach this stage.

The following sectors may not be eligible for support:

  • Sale of Motor Vehicles
  • Real Estate / Speculative Property Development
  • Professional Services
  • Social and Personal Services
  • Local Services

As a guideline, the following sectors are likely to be eligible for support:

  • Manufacturing
  • Service to manufacturing
  • Construction
  • Wholesale
  • Transport and Distribution
  • Software
  • Agriculture linked to farm diversification 
  • Tourism & tourism infrastructure
  • Service based (providing they are not one of the sectors not normally eligible for support)

Each applicant will be required to demonstrate the additionality that their business/project will achieve at the local or Scottish economy level. Certain business activities which may not strictly adhere to the above sectors may be considered, including:

  • Restaurants which support the local tourism product
  • Retail activities in isolated settlements where there is no suitable alternative provider within the area or with a specific tourism focus
  • Specialist B2C activities where key skills could be lost (e.g. specialist florists)

Loan Terms

Loans are available to all eligible businesses who meet the above criteria whilst also demonstrating their commercial viability. The interest rate will be fixed at 6% for the term of the loan. The interest rate may be higher for new businesses with a poor credit rating and low levels of security. No other fees or charges will be applied. The maximum repayment period is 5 years, although 'capital holidays', up to 3 months, may be considered.

Each loan will be subject to a tailored loan agreement. This is a legally binding document that will be prepared after a loan is approved.

Business Loans Scotland reserves the right to seek any form of security as appropriate. This may include a Standard Security, a Bond and Floating Charge, a Personal Guarantee or any other form of security deemed suitable.

How it Works