SMALL businesses in the Borders can start applying for up to £10,000 of interest free loans from Scottish Borders Council.
The new £300,000 Business Loan Fund to help local businesses overcome difficulties in accessing finance by providing affordable, interest free lending is now open for business and will run for the next 12 months as a pilot.
The fund will provide essential loans to small businesses, backed up with independent business support from experienced Business Gateway advisers.
Access to business finance has been restricted by the banks in recent years and small businesses have found it more difficult to fund business investment from these traditional sources.
Loans of up to £5,000 are available to start-up businesses repayable over a term of up to two years. Established businesses can borrow up to £10,000, repayable over a term of up to three years.
Councillor Stuart Bell, executive member for economic development, said: “In May 2012, a new plan ‘Ambitious for the Borders’ was agreed by the council’s administration. This prioritises economic growth as a key objective for the council. The creation of a new Business Loan Fund is one of our key commitments, to be established within our first six months in office.
He added: “The Scottish Borders Business Fund has been subject to high demand over the last two years, and we have been working to identify ways to provide additional support to business. The new loan fund will help bridge the gaps in current access to finance which will help allow businesses to grow and succeed.”
Graham Bell, chairman of Scottish Borders Branch of the Federation of Small Businesses, said: “Business finance and its cost is regularly cited by our members in the Borders as their biggest business worry. This new loan fund is a welcome initiative at a difficult time. It is interest free with an affordable service charge so will be a great help to small businesses throughout the region, offering much greater degrees of certainty. The modest levels of funding are just what small businesses need to see, and our board has no hesitation in welcoming this timely initiative.”
James Aitken, convenor of the Scottish Borders Chamber of Commerce, commented: “Businesses in the Scottish Borders have been crying out for support like this. The loan fund will be well received by businesses in the Borders and we expect a large take up.”
Lending decisions will be made by a ‘Funding Panel’ including officers from economic development and finance teams and terms and conditions include: businesses of 49 employees or less; the loan will not normally provide loans for working capital purposes; the maximum of £10,000 loan funding will be repayable between 12-36 months; match funding is not required; a loan fund initial arrangement fee of 5% is to be paid; and a three month payment holiday will be available if required.
For further information contact: Tel: 01835 826787; Email: email@example.com