Scottish Business Loans

From working capital to commercial mortgages, business funding options are plentiful for SMEs in Scotland.

Loans for small businesses in Scotland

There’s been a boom in new private sector businesses in Scotland over the last 17 years; since 2000, private enterprises have grown by just over 46% – that's an increase of over 110,000 businesses. Although 2016 saw a slight decrease from the 2015 figures, they are still the second highest this millenium.

Scotland boasts businesses in all industries – from construction to oil and gas, from tourism to life sciences. Many harness the research and innovation potential of universities in Aberdeen, Edinburgh, Dundee, Glasgow, St Andrews, Strathclyde and Stirling, among others.

In fact, research and development is big in Edinburgh, which is cited as one of Europe’s top 10 locations for science and technology.

Not only that, but in a report published by the Scottish parliament in October 2016, SMEs in Scotland were found to have the sixth highest average turnover of all regions in the UK.

Scottish business loans

To sustain the success of Scotland’s SMEs, it’s crucial that they can get hold of small business financing when they need it. But with banks rejecting so many lending applications, where can they go for help? Here’s a list of suitable alternative finance providers that lend to Scottish small and medium-sized enterprises.

Fleximize – We offer a range of unsecured business loans from £5,000 to £250,000. This is a quick and convenient source of financing – the money can be with you in as little as 48 hours. You only need to be trading for a minimum of six months, and you can repay over a term of one to 48 months. The loans are tailored according to your business' unique needs, and a Fleximize relationship manager will take you through the process, step-by-step.

New Startup Scotland – Entrepreneurs unable to get financing from other sources can apply for a startup loan of up to £25,000, although the agreed amount will be decided based on your business plan. It’s a personal loan, not a business loan so be prepared to provide guarantors. Your business must be a maximum of 24 months old, and you must be over 18 to apply.

Scottish Loan Fund – Large loans ranging from £250,000 and £5 million are available to SMEs that are growing through exporting. The funding is actually a mix of debt and equity for capital expenditure, working capital, overseas expansion and other purposes. However, the financing isn’t available for sectors including retail, motoring, real estate and professional services. Businesses repay the loan over a term of up to 5 years. Your turnover must be at least £1 million in the last year of trading prior to application.

Support for Aberdeenshire Business (SAB) – Business loans are available for local SMEs to help develop the regional economy and create jobs. The money can be used for plant and equipment purchases or working capital. Loans start at £5,000 with a top limit of £25,000. However, the cash will only fund up to a third of your required total funding.

ALG Finance Business Lending – SMEs planning to refinance or buy equipment or vehicles can apply for loans between £5,000 and £100,000. Repayment terms range from 2 to 4 years.

Social Investment Scotland All Purpose Loan – Social enterprises and community businesses in Scotland are eligible for loans between £10,000 and £1 million. Money is used to have a long-term impact on local communities. The repayment term is up to 13 years.

Start and Grow Scotland – To support business growth in Scottish regions, a combination of loan and grant packages between £10,000 and £60,000 are available. The grant makes up a third of the amount, and the rest needs to be repaid over a period of up to 5 years. Funding isn’t given to businesses that can access commercial financing.

Care and Wellbeing Fund – This is a specialist fund for social enterprises. They must be community-based limited companies or CiCs, providing health and social care services, which support people affected by cancer. Also, their projects should be worth between £500,000 and £2.4 million.

Shetland Islands Council – Businesses with projects on the Shetland Islands can apply for funding to safeguard jobs, create new ones, increase exports and develop remote areas, among other goals. Whether you’re a startup or existing SME, the council will fund some of your project costs – you need to find at least 25% from another source. Working capital and capital items like equipment can be covered by the loan.

APS Business Finance – This alternative lender provides Merchant Cash Advance loans up to £100,000. You only pay a small portion of sales through your card terminal, so there’s no fixed monthly payment. It’s suitable for some retailers but if you prefer to know how much you’ll be paying every month this might not be the best option for you.

DSL – SMEs can borrow from £1,000 to £50,000 if they’re in Scotland and have been a UK resident for at least 3 years. A business plan with at least 1 year’s financial projections is required.

West of Scotland Loan Fund – Traditionally a funder of manufacturers, this lender now supports all industries in the region. Loans up to £100,000 are available to startups and established SMEs. The money can be repaid over a term of up to 7 years. Businesses need to prove they can fund half of the total amount from the private sector. Security and personal guarantees are usually required.

Resource Efficient Scotland SME Loans – SMEs in Scotland looking to reduce carbon emissions, save money and boost competitiveness. The interest-free money is for companies to introduce measures like improving efficiency is use of energy, material resource and water. The investment can also be set against capital allowances.

East Scotland Investment Fund – Limited companies, partnerships, social enterprises and LLPs can apply for loans up to £50,000. However, the money can only fund up to 50% of a full funding package – the balance must be sourced from the private sector. SMEs in sectors including manufacturing, wholesale, construction, software, tourism and transport can apply. Industries not accepted include retail, motoring, professional services, pubs, restaurants and real estate.

Apply for an SME loan today

Regardless of your industry, if you’d like to have a chat about unsecured business lending, contact us on 020 7100 0110.

Or apply for an unsecured loan by clicking on the Apply Now button – you could have the cash in your account within two days.

Get started: Apply now

If you want to delve deeper into small business finance, then look at The Ultimate Guide to Business Funding.