Social Investment Scotland (SIS) has opened applications for a £3.5 million loan fund to support micro small and medium-sized businesses (MSMEs) in communities, initially across the West of Scotland.
The launch of the fund marks the first pilot phase of its accreditation under the British Business Bank’s Community ENABLE Funding (CEF) programme, and the first time SIS has been able to provide funds to limited companies, sole traders or partnerships.
The pilot will run until December, with loans of between £25,001 and £125,000 available to eligible smaller businesses based in specific postcodes in seven local authority areas: Glasgow, Argyll and Bute, West Dunbartonshire, North Ayrshire, South Ayrshire, East Ayrshire and Inverclyde.
SIS plans to widen access to the fund across the rest of Scotland once the pilot phase concludes and its approach has been tested.
The launch follows recent confirmation that SIS had become the British Business Bank’s eighth Community Development Finance Institution (CDFI) lender accredited under CEF, and the first with a dedicated focus on Scotland.
The accreditation makes SIS one of a small number of lenders nationally delivering the programme, which aims to support up to £150m of lending to smaller businesses across the UK over its first two years.
Loans are available to limited companies, sole traders, partnerships and limited liability partnerships, with terms of between one and six years. Pricing is in line with other similar CDFI funding programmes, and funding is open to most sectors, with certain exceptions.
Smaller businesses based in the seven pilot areas that are interested in applying can visit the SIS website here, where SIS provides contact details for its network of CEF partners and brokers currentlyincluding Altruistic Commercial Finance and TSF Finance. Businesses can also apply by contacting the Business Gateway service for the relevant pilot region.
Tom Arthur, Minister for Business and Fair Work, said: “Scotland’s smaller businesses are the backbone of our economy, and I commend Social Investment Scotland on securing accreditation to deliver the British Business Bank’s CEF programme for the first time in Scotland.”
Reinald de Monchy, chief banking officer at the British Business Bank, said: “Social Investment Scotland has a strong and trusted track record in the region, and we are confident that their local insight will help break down barriers to finance for a wider pool of entrepreneurs, supporting job creation and enabling them to realise their full potential.”
Alastair Davis, chief executive of Social Investment Scotland, said: “We’ve been making the case for a fund like this in Scotland for some time, so it’s fitting that SIS is the one delivering it.
“Access to finance remains one of the biggest barriers facing small businesses in some parts of Scotland, and this is particularly apparent in the West of Scotland communities we’re targeting first.
“Starting with a focused pilot lets us build the right partnerships and prove the model works on the ground, before we open the fund to businesses across the rest of the country.
“This is what our Community ENABLE Funding accreditation was always about. Turning a UK-wide programme into real, local investment that creates jobs and builds resilience in the places that need it most.”
SIS is an established CDFI, with more than 25 years’ experience delivering responsible, impact-led lending to social enterprises and charities across Scotland.
SIS recently led the delivery of The Community Investment Enterprise Fund, bringing Lloyds Bank, Better Society Capital, Triodos and four CDFIs together as fund manager to invest £72m into 750 MSMEs businesses across England and Wales.
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