Coronavirus - Scottish Government launches Hardship Funds for Scottish SMEs

Ryan Diplexcito

Ryan Diplexcito

Business Advisory Partner

As of 30 April 2020, the Scottish Government has opened applications for Scottish SMEs who are in a vulnerable financial position as a result of the COVID-19 pandemic, to receive a further lifeline.

The bespoke, needs-based funding in the form of three new grants, will be administered by Scottish Enterprise and awarded to the newly self-employed suffering hardship and SMEs in distress.

Our advisers have reviewed the criteria relating to the three funds and summarised the key points below.

Pivotal Enterprise Resilience Fund

This fund will provide grants to support Scottish SME firms with working capital to help them to get back up and running, or to continue trading.

Businesses applying must be able to not only demonstrate financial vulnerability as a result of the current climate but also present a strong business case for their future viability and contribution to the recovery of the local, regional or national economy.

Essential eligibility criteria

Companies applying must:

  • Have been trading successfully before Covid19 and have up to 249 employees
  • Generate less than €50 million turnover or balance sheet total of €43 million
  • Be able to demonstrate the funding will support business to be viable
  • Not have been in financial difficulty before 31 December 2019
  • Be Fair Work employer or working towards becoming a Fair Work employer
  • Have a business bank account

The grant is needs-based and successful applicants will be able to provide evidence of or demonstrate impact in one or more of the following areas:

  • Drive economic prosperity - wages, employment, exports, supply chain
  • Supplier or potential supplier to NHS or other COVID-19 vital services
  • Suppliers to other essential businesses
  • Need to rapidly scale up or diversify due to COVID-19 opportunities
  • Continue to trade or are able to come out of hibernation when the time is right
  • Grant is for working capital to help meet a cash flow gap and secure their future in the medium-term growth as a result
  • The grant can augment other funding from Government and other sources
  • Contributing to cashflow items e.g. rent, wages, directors’ salaries, heat, light & power, materials, transport, financing costs-VAT/HMRC, creditor payment

For the Pivotal Company Resilience Fund, companies must provide:

  • Bank details
  • Financial information-working capital gap, cash flow projects
  • Information on other financial support including COVID-19
  • Explain use of the grant
  • Explain in what way they are pivotal to the local, regional or national economies
  • Information on how the grant will help sustain or expand trading

For other important information or to apply, click here.

Creative, Tourism & Hospitality Enterprises Hardship Fund

This grant of up to £25K will be awarded on a first come first served basis to companies in the creative, tourism and hospitality industries who have not been eligible for other COVID-19 business rates’ relief or other COVID-19 grants and who require funding to contribute to a short-term cash flow gap for the next three months.

The grant is needs-based and successful applicants must be able to provide evidence of or demonstrate financial hardship due to the current crisis.

Essential eligibility criteria:

  • Companies up to 49 employees
  • Experienced at least a 50% loss of current or projected revenue
  • Not in financial difficulty pre 31 December 2019
  • Not for pre-revenue companies
  • Must have a business bank account

For the Creative, Tourism and Hospitality Enterprises Hardship Fund companies must provide:

  • Company information
  • Bank details
  • Financial information
  • Working capital gap, cash flow projection

For further important information and to apply, click here.

Newly Self-Employed Hardship Fund

This fund is designed to support those who became self-employed on or after 6 April 2019 and are not eligible for the UK Government scheme. Successful applicants will receive a one-off payment of £2,000.

Essential eligibility criteria

You must sign a declaration confirming that you meet all of the following criteria:

  • You became self-employed on/after 6 April 2019 (did not submit a tax return including income from self-employment for 2018-19)
  • Over 50% of your individual income is from self-employment
  • Your trading profits were below £50,000 in financial year 2019-20
  • You have lost business due to coronavirus and are suffering financial hardship as a result
  • You are ineligible for other COVID-19 related business support (including the Business Interruption Loan Schemes, Corporate Finance Fund, Job Retention Schemes, Future Fund, R&D Focussed SMEs Fund, HMRC Self-Employment Income Support Scheme, Non-Domestic Rates relief, Small Business Grant or other business support)
  • You do not receive working age benefit payments (Universal Credit, Statutory Sick Pay, Employment and Support Allowance, Job Seekers’ Allowance, Income Support) or have applied for but not yet started receiving Universal Credit
  • You trade as self-employed, not as a limited company or partnership
  • You have taken steps to limit costs and expenditure (including through schemes such as VAT deferral and seeking a mortgage payment holiday)
  • You do not have access to sufficient savings or other sources of income to meet basic needs

For the Newly Self-Employed Hardship Fund you must provide:

  • Documentation to show you had an active business prior to COVID-19, such as your VAT registration, bank account statements showing revenue and outgoings linked to self-employment, marketing materials, etc. A full list is provided with the application form.
  • Self-declaration that you are currently experiencing hardship
  • Evidence of being resident in the local authority area of application

For further important information and to apply, click here.

If you need assistance and would like to speak to a Johnston Carmichael Adviser, please don't hesitate to get in touch with your local adviser.