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Scottish Government Announce Emergency Loan Fund For SME Housebuilders

11th May 2020

Housebuilders will be able to apply for short-term loans of up to £1 million from the Scottish Government to support them through the coronavirus (COVID-19) outbreak.

Small and medium-sized enterprises (SMEs) with liquidity issues due to the temporary closure of the housebuilding sector will be able to apply to a £100 million Scottish Government emergency loan fund.

Who can apply?
SME housebuilders who can demonstrate that:

  • They are an existing business in Scotland which has been directly affected by COVID-19.
  • Their turnover is less than £45 million and they are building five or more homes per annum.
  • Their business was financially viable before COVID-19.
  • Funding cannot be secured from existing lenders or their own resources to meet liquidity needs.
  • The business has been unable to secure sufficient funding from UK Government or other Scottish Government COVID-19 schemes. 

How much funding is available?
The fund will offer short-term loan funding to applicants to cover 3 months of liquidity support to their business. Key features include: 

  • loans available between £50,000 to £1 million
  • fixed interest rates of 2% per annum
  • flexible repayment terms, with the option for capital and Interest payments to be offset for 12 months. The majority of loans are expected to be repaid within 24 months
  • security on loans will be assessed on a case by case basis

Applicants will be asked to confirm why existing support routes are not appropriate or sufficient.

SME housebuilders will be able to apply for loan support from 14:00 on Monday 18 May on the Scottish Government website. Full details on the criteria for the Fund will be available at that point.

Applicants should be a SME housebuilder with a turnover of £45 million or less per year and building five or more homes per annum. They should only apply for funding that is necessary for the short term. They will be asked to explain why existing support mechanisms are not sufficient for their business.

Loans are capped at £1 million, most loans are expected to be repaid within two years with interest rates set at 2%. The minimum loan amount is £50,000.


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