Filling the funding gap for smaller firms - Barry McCulloch

All too frequently we hear about firms having to cease trading and close their doors because of mounting economic pressures and rising costs.

It is a challenging time for everyone, and given the headwinds facing business owners across Scotland, it’s never been more important to provide access to the funding and support they need to build resilience.

We want to ensure that smaller businesses do not get left behind. This week marks our first annual Business Finance Week which aims to do just that, helping smaller firms learn more about the different finance options available to them to support their individual requirements.

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A range of events will take place across the UK up to Friday, November 11, with various sessions designed for business owners at different stages of growth. We have seminars covering angel investment and equity for growth, while the final events of the week will focus on sustainability and green finance – a growing priority for small businesses as the nation’s net zero deadline approaches.

During challenging economic times we are likely to see more early-stage companies need access to further fundingDuring challenging economic times we are likely to see more early-stage companies need access to further funding
During challenging economic times we are likely to see more early-stage companies need access to further funding

On Monday, the programme kicked off with a focus on start-ups and early-stage entrepreneurs. It has now been 10 years since the Start Up Loans Scheme launched and it continues to be an important support mechanism for aspiring business owners, particularly for those who may otherwise find it difficult to secure loans from traditional lenders.

The programme provides funding of up to £25,000 at a fixed interest rate but also offers valuable support in the form of mentoring and guidance for recipients, including activities like marketing and writing a business plan. Since the programme launched in 2012, more than 6,300 loans worth more than £55 million have been offered to new business owners in Scotland through our network of delivery partners, and we are building on that number every week.

Glasgow-based Pastéis Lisboa, Scotland’s first specialist Portuguese Pastel de Nata (custard tart) bakery, was recently selected among 12 small businesses to be an ambassador for the programme. We wanted to celebrate the success the owners have seen in the first few months of trading as a result of their ambition and determination – they are now considering opening a second bakery in Edinburgh too.

For some businesses, however, it can take a bit longer to get up and running and they might not recognise the need for financial support until slightly further down the line. That is why we have expanded the Start Up Loans programme to now include businesses that have been trading for up to three years. Additionally, and perhaps even more valuable during challenging times, smaller businesses less than five years old can now apply for a second tranche of funding.

One firm to take advantage of that already is Mistral, a specialist wine shop and bar in Leith, Edinburgh. Founders Julie Di Toro and Sam Barker turned their dream of running their own business into a reality after they were made redundant from previous jobs during the pandemic. The couple first applied for a Start Up Loan in 2020, but after recognising a requirement for further finance to support the fit-out of their wine bar, received a second loan to support its launch.

During challenging economic times, we are likely to see more and more instances where early-stage companies need access to further funding to not only grow and diversify but to keep trading while times are tough. We’re also seeing businesses that had just started when the pandemic hit come to us for support to take the next steps now that they are back on their feet.

Throughout this week, we hope to show entrepreneurs and business owners that they have a range of options and help is available to secure the financial support that they might need, whatever their circumstances. For more information and to join our events, visit:

Barry McCulloch, senior manager, UK Network, Scotland at the British Business Bank



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