Stevenson Hails Launch Of Business Loan Fund

Banff & Buchan MSP and SNP candidate for the new Banffshire & Buchan Coast constituency Stewart Stevenson has welcomed the announcement that the new £55 million Scottish Loan Fund is now open to applications from eligible businesses throughout Scotland.

The fund will provide loans of between £250,000 and £5 million to companies which have an annual turnover over £1 million, up to 250 employees and can either demonstrate growth or the potential to grow.

Private sector investment is also being sought to grow the amount available through the Scottish Loan Fund, and further boost the economic opportunities available to SMEs in Scotland.

Commenting, Mr Stevenson said:

“Throughout the economic difficulties of the last couple of years, one of the most consistent complaints has been the difficulty that many businesses have had in accessing adequate finance from the banks. When companies with real growth potential are unable to access the funds they need to expand, Scotland’s economic potential is being held back. Unfortunately, I am aware that too many companies locally have had cause to complain about the banks in this way.

“The launch of this fund will help to address this problem and I sincerely hope that additional private investment will help see the amount of money available to be loaned grow, increasing the impact it can have.

“The Scottish Government’s overriding priority is sustainable economic growth, and the Scottish Loan Fund will help to encourage this.

“This announcement is extremely positive for the Scottish economy and I hope that suitable businesses in Banff & Buchan will be able to benefit from the financing that is now available.”

Scottish Loan Fund Q&A:

What types of firm will be eligible to apply?

Established SMEs (broadly, firms with up to 250 employees) in Scotland with annual turnover above £1 million across most sectors of the economy will be eligible. The Fund targets SMEs which demonstrate growth or the intention to grow and exporting SMEs, as they have the most to contribute to Scotland's economic growth.

What market gap will the Loan Fund target?

The Loan Fund will conventionally lend to firms which, though established and viable, may not be able to offer the extent of security or earnings cover typically sought by a bank or other commercial lender. The cost of borrowing will likely reflect this higher degree of risk.

Eligible firms will be able to apply for loan amounts in the range £250k to £5m, though the great majority of loans will be for amounts of less than £2m.

What types of loans will be offered and what will be the cost to borrowers?

The fund manager will negotiate individual loans on a fully commercial basis, taking into account the particular circumstances of each borrowing company. Most loans, however, will likely have repayment terms of between three and seven years.