With the COVID-19 pandemic impacting many businesses our Fund Manager, Andrew Dickson, caught up with the team at The Herald Scotland to talk all things funding and finance and explain how we've been supporting Scottish SMEs during these extremely challenging times.

Explain a little about BLS, what its function is, what expertise it can call upon and what sort of businesses it supports?

Business Loans Scotland (BLS) is the Fund Manager for a £7 million loan fund, which seeks to invest in new and growing Scottish SMEs. Fully funded through the Scottish Growth Scheme and the European Regional Development Fund (ERDF). BLS aims to ensure that good, commercially viable proposals do not fail as a lack of access to finance. 

BLS is a consortium of Scotland’s 32 Local Authorities and therefore works closely with other Government led organisations including Business Gateway and Scottish Enterprise to support small and medium sized enterprises across Scotland to realise their start-up and growth ambitions. 

What advantages do you offer compared to other sources of funding?

There are many advantages to borrowing funds through Business Loans Scotland.

Firstly, our loans come with a fixed interest rate giving borrowers peace of mind in knowing exactly what to expect when it comes to repayments.

We also understand that applying for a loan can be daunting and so our Loan Officers are on hand to guide applicants throughout the entire process and offer support and guidance where required.

As a consortium of the 32 Local Authorities, BLS is a Government backed organisation and therefore differs to private sources of funding as we work collaboratively with all Scottish Local Authorities to ensure the best outcome for each business is achieved.

We are also proud to offer a personable service and as a small business ourselves, can relate entirely to those applying for loan funding.

What impact is the pandemic having on BLS and its client base?

The current pandemic has impacted BLS and our current borrowers in various ways.

For BLS as a business, we are experiencing an increase in the number of loan enquiries received as many SMEs across Scotland seek additional finance to support their business through these extremely challenging times.

Additionally, we have had to adapt our daily working processes and become flexible in our approach to ensure SMEs across Scotland continue to receive the support and funding they require whilst maintaining the health and safety of the BLS team at all times.

In regards to our current borrowers, the pandemic has impacted them in many different ways.

For businesses that fall into sectors such as manufacturing or food and drink, they have experienced a colossal increase in demand for their products or services since the outbreak of COVID-19 and some of these businesses have since applied for additional funding through BLS to support their growth plans with purchasing additional equipment or introducing new product lines to meet customer demand.

For other borrowers who fall into sectors such as leisure or tourism, the pandemic has had a catastrophic impact which has seen these businesses close their doors for the time being and put all growth or expansion plans on hold.

What support are you offering your existing client base at the present time?

We completely understand the impact in which the COVID-19 outbreak is having on businesses across the country and therefore supporting Scottish SMEs through these challenging times is of utmost importance to us.

As a result of this, BLS made an early decision on 17^th March 2020 to suspend repayments for all of our borrowers with a 3 month capital and interest holiday, in the belief that this would relieve some of the financial pressures facing businesses in these unprecedented times and thereby giving them time to focus on the safety and well-bring of themselves and their employees.

Following this, we have taken the decision to extend the capital and interest holiday for a further 3 month period from 1^st July – 30^th September to support our borrowers as much as possible through this pandemic.

We have also maintained regular communication with borrowers and are passionate about providing a personable service where borrowers can contact us at any time to ask for advice or support in regards to the funding available.

Additionally, we recently launched our COVID Working Capital Loans which has helped expand our loan offering and this will provide access to loan finance to Scottish based SMEs in addition to the UK and Scottish Government grant and loan funding currently available.

How long will this assistance last?

The COVID Working Capital Loans will be available until 31^st December 2020.

Additionally, our current Start-up and Growth Loans which provide funding for small and medium sized enterprises remains open for applications. Our aim is to ensure as many businesses across Scotland receive loan finance from BLS to support them through this pandemic and where the business has been impacted severely, we hope these loans will enable them to survive during these extremely challenging times. 

The Scottish Government is providing funding assistance to businesses during this crisis, is BLS part of that scheme or entirely separate?

BLS is not part of the Government backed support loan schemes however Scottish Government is giving BLS increased flexibility within the existing funds to support businesses impacted by COVID-19 with working capital loans.

This flexibility will allow BLS to support businesses who expect a significant increase in demand or for businesses which need further support to help them smooth cashflow as they trade their way out of this pandemic.

What advice would you offer to someone who may have been made redundant and is thinking of starting up a new business in the current climate?

With anyone looking to set up their own business, the first thing they should do is contact their local Business Gateway which offers support and advice alongside free online workshops providing information on a range of aspects of starting and running your own business.

BLS would also encourage the completion of a business plan which can be used to identify any risks and weaknesses in the business proposal as well as the strengths and opportunities. It is prudent to do a lot of research in terms of your experience and skillset, the market, your competition and customer base of the sector that the business would be operating in. 

This plan can also be used as a base for calculating cash flow projections to evidence whether the business would be viable and is there are any shortfalls in cash requirements.  

There will be opportunities out there and if you do your homework you have a much stronger chance of turning your idea into a successful business.