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.Am I Eligible? Apply Today
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.
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.Apply Today
We can support the following types of legally formed and trading businesses:
Our primary focus is on businesses engaged in the Business to Business (B2B) and Business to Consumer (B2C) categories.Discover Eligible Sectors
On submission of your fully completed application, including all the relevant supporting documentation which meets BLS criteria, we aim to make a decision and issue you with your loan offer within 2 weeks (10 working days).
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.
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 on your PC / laptop before you start your application. OLA will accept Word, Excel and pdf formats.
Use our checklist before you proceed to ensure you and your business are ready to apply. This can help to avoid any unnecessary delays in processing your application.
You can also 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.Loan Checklist Loan Calculator
If you think you are ready to apply for funding and have all the relevant documents and information prepared according to our checklist, then you should proceed to submit an enquiry. One of our Loan Officers will be in touch to discuss your enquiry.Apply Today
Businesses can borrow from £25,000 up to £100,000 (£250k available in exceptional circumstances). Applicants should confirm they have explored all other funding options including personal funds and borrowings, bank funding (including factoring and asset finance) and the potential for equity from venture capitalists.
Do I have to make a Contribution?
BLS normally provides up to 50% of the total funding required up to a maximum of £100,000 (£250k in exceptional circumstances). BLS would expect the other 50% to be sourced from the private sector, for example bank funding, directors / owners input, equity investment, HP etc. Please note that Invoice Discounting or Factoring is not a suitable source of matched funds.
In exceptional circumstances, the funding sought can extend to more than 50% of the total amount required. Where BLS is being asked to provide more than 50% of the funding package and where there may be a higher degree of risk associated with the project, additional information and / or security may be required.
The interest rate is fixed at 6% for the term of the loan. If you are a new business (trading less than 12 months at the time of application) with a higher risk profile and / or low level of security available, a higher rate of interest may be applicable.
Fee Free – no set up costs or early repayment charges.
Up to 5 Years.
How do I make repayments?
Payments will be collected by Direct Debit on the 7th of every month.
Up to 3 Months Capital Holiday (if appropriate and agreed).
BLS will review all applications on a case by case basis and will request security based on the assessment of the lending risk.
What is the process?
If your business meets the criteria you should submit an enquiry. Thereafter, a Loan Fund Officer will contact you to discuss your requirements and if everything is in order you will be given access to our Online Loan Application (OLA) system, where you can complete an application and upload all the relevant documentation.
Your application will be appraised and a decision made by BLS. If approved you will require to sign a loan agreement and any associated security documents. The funds will then be paid directly into your business bank account.
We aim to make a decision within 2 weeks of receipt of your completed application and all relevant documents which meets BLS criteria. If approved, funds should be available within 20 business days of receipt of application and all relevant documents.
What is the process?
Loans may be used for:
You will be assigned a Loan Fund Officer to assist during the application process. You can also receive ongoing support, advice & training from Business Gateway and Local Authority Economic Development teams.
Who is providing the Loan?
The Loan is provided by Business Loans Scotland from the Scottish Growth Scheme - Business Loans Scotland Debt Finance Fund LP (SL033447) and is fully financed by the Scottish Growth Scheme and the European Regional Development Fund (ERDF) through the European Structural Funds 2014 -2020 Programme.
As a guideline, the following sectors are likely to be eligible for support:
The following sectors are not normally eligible for support:
If you are unsure if your business falls into any of the foregoing categories you should contact BLS for further guidance.
If you can answer yes to all of the above, you are ready and BLS would love to hear from you.
If you have any queries regarding the criteria and / or your business being ready to apply for a loan please email us at firstname.lastname@example.org
In addition to the essential documents listed below you can upload other documents that you consider relevant to your application such as market research, customer testimonials, copies of patent applications and such like.potential for equity from venture capitalists.
The Business Plan should incorporate information on your proposal. You can download a Business Plan Guide here for additional information and advice.
At least 3 years full historical financials should be provided or for the period since trading began if less than 3 years.
Management information should be provided for the period from the last set of annual financial statements to the time of application.
This should show the Directors, Partners and key people in the business.
Planning permission and/or building warrant
Evidence of planning permission and / or building warrant where the business plan includes this type of expenditure.
Business Bank Statement
Provision of a Business Bank Statement dated at the time of application to confirm a Business Bank account is held. This needs to evidence the bank account details.
Personal Statement Form
Personal statements are required from all key people involved in the day to day management of the business. The Statement is required to comply with anti-money laundering legislation and will allow the individual to provide confirmation of identity, address and provide a personal credit history. These have to be completed by directors, owners who own 25% or more of the business, partners that are active in a business and Trustees and other senior officials that are active in the management of a charity.