Small and medium sized enterprises will receive European Regional Development Fund investment worth £40 million to help transform their innovative ideas into economic success stories.
The funding, which will be allocated through the Scottish Government’s new SME Holding Fund, will give companies access to microcredit finance of up to £25,000, loans of up to £100,000 and equity investment of up to £2 million.
The investment will also support a trade body aimed at encouraging investment in young, innovative Scottish companies.
The Holding Fund’s £40 million will be matched by an additional £60 million from public and private sector delivery partners, alongside private sector funding of £150 million so that at least £250 million is invested in 500 companies by December 2018, creating 2,000 jobs.
Cabinet Secretary for Economy, Jobs and Fair Work Keith Brown confirmed the funding on a visit to start-up business Café Bellina in Edinburgh. He said:
“Small to medium sized enterprises represent 95% of businesses. It’s crucial that we do all we can to help them thrive so we can boost economic growth – our Small Business Bonus has already delivered more than £1 billion in savings for the sector.
“Businesses like Café Bellina are a great example, providing a service to the local community as well as employment opportunities.
“We want the right help to be available to entrepreneurial Scots at the right time. The new SME Holding Fund represents a great opportunity for business people seeking to get their ideas off the ground.
“The £40 million investment will benefit a broad range of businesses and is projected to create 2,000 jobs. It is yet another example of exactly why maintaining Scotland’s relationship with the EU is so important as set out in our document – Scotland’s Place in Europe – yesterday. It outlines our determination to keep Scotland’s place in the European Single Market, which delivers so many social, economic and cultural benefits for individuals, businesses and communities and is the best way of guaranteeing jobs, investment, services and projects across the country.”
Nadia Di Viao runs Café Bellina with her brother Luigi and recently benefited from a business loan from the Scottish Microfinance Fund provider, DSL. She said:
“At Café Bellina, our first goal is to make people feel at home whilst tasting our homemade Italian specialities. We cook everything from cakes and arancini, to pasta, pastries and paninis. Everything is made with passion and care for detail.
“Finding the finance to open a cafe hasn’t been easy at all, one bank completely ignored our request for a loan and a second one refused our application. Thanks to Business Gateway, we were referred to DSL Business Finance which runs the Scottish Microfinance Fund. It’s great that the Scottish Microfinance Fund will provide emerging entrepreneurs who may not be able to access traditional finance the chance to follow their dreams.”