If you’re looking for funding as a Scottish business, there’s a range of options available.
This article will help you understand the different types of business loans and business grants in Scotland, making it easier to find the right one for your business.
In Scotland, businesses have a variety of loan options to consider. Each type of loan can suit different businesses, depending on their funding needs, the size of the loan and the financial health of the business. Here’s an overview of some common types of business loans available:
Term loans: These are traditional loans where a business borrows a fixed amount of money and repays it with interest over a predetermined period. They can be secured or unsecured, depending on whether collateral is provided.
Revolving credit facilities: This type of loan lets you borrow money up to a certain limit whenever you need it, and you only pay interest on what you use. It’s helpful for covering everyday expenses or unexpected costs.
Asset finance: If you need to buy equipment or machinery, you can use asset finance Usually the loan is secured against the asset being purchased. This means there is less risk to the lender, so they can be easier to obtain and may come with more favourable terms.
Invoice financing: This allows businesses to borrow money against the amounts due from customers, helping to ease cash flow problems.
Merchant cash advance: Ideal for Scottish businesses that take payment by card. This is a type of funding where a business receives a lump sum of money upfront and repays it through a percentage of their daily credit card sales.
Commercial mortgages: For businesses looking to buy or refinance commercial property, commercial mortgages are a long term financing option.
Start-up business loans: Aimed at new businesses, start-up loans can help provide capital for businesses without a long trading history. However they might come with higher interest rates and be tougher to get because they’re seen as riskier for lenders.
Scotland offers a wide range of government loans and grants to help businesses grow, innovate, and become more environmentally friendly. Here are some of the main options available:
The Scottish Growth Scheme program offers £500 million in financial support to help Scottish businesses expand, including extra help for those in the Highlands and Islands.
Scottish Enterprise can help businesses to access a number of grants. These grants cover various needs, including starting new projects, improving research and development, and expanding manufacturing facilities.
Skills Development Scotland is an agency that helps businesses get funding for training programs and to hire apprentices.
Business Energy Scotland is funded by the Scottish Government and aims to help businesses save energy, carbon and money. They offer unsecured interest-free loans to businesses that want to save money by using fewer resources and being more eco-friendly.
Getting a business loan involves a few steps. Here’s how you can get a loan for your Scottish business with Capitalise:
Capitalise is a UK based platform, our mission is to help businesses to take control of their financial health. We support business owners through our FCA regulated platform, an easy way for businesses to access over 100 lenders and compare their loan products. Our advanced platform makes intelligent matches and ranks lenders, based on their past successes, to help businesses select the best funding solution.
Capitalise also enables businesses to check their own Experian business credit score to better understand their financial health. Plus businesses can check the credit profiles of the companies they work with to reduce risk.
The eligibility criteria for a business loan will depend on a number of factors, for example the type of loan you’re looking for and the lender you apply to.
Lenders usually have a basic set of requirements to limit their risk. So, most will want to see:
Depending on the loan, you might also need to show a certain monthly income or own valuable assets.
With a Capitalise for Business account, you can check if you're eligible for a business loan for free.
A business loan can be used for a variety of purposes to support and grow your business. Here are some common uses:
Essentially, you’ll be able to use a business loan for any purpose, as long as it relates to the business’ needs and not for personal purposes.
