Significant investment support announced for entrepreneurs and innovators affected by COVID-19

In recognising the pivotal role entrepreneurs and innovators play in fuelling Scotland’s economy, the Scottish Government has announced a new £38 million funding package to help early stage, high growth businesses.

The last five months have been challenging for the majority of businesses, but it’s been particularly tough for promising new start-ups, with the potential to be a high growth business, to secure the cash requirement needed to allow them to grow and develop.

The £38 million package will be managed by Scottish Enterprise and funding has been divided into three levels of support to help businesses at different stages of early growth:

  • £3m allocated as grants of up to £50k plus advisor support for start-ups identified as having the most significant potential to grow and attract future investment. This is targeted at pre-seed businesses (i.e. those businesses not ready to receive equity investment).
  • A competitive £25m Early Stage Growth Challenge Fund to provide successful applicants with a mix of grant and investment funding up to a maximum of £300k. This support will help equity-backed businesses to continue innovating through the pandemic and bridge the gap to their next investment round. The fund will open to applications on Monday 20 July. The investment is in the form of a convertible loan note, and as such it will not qualify for EIS. Unlike the UK Government’s Future Fund, there is no matched funding requirement.
  • An additional £10m for Scottish Enterprise’s existing Scottish Investment Bank co-investment funds to help stimulate private investment and support businesses that need more significant levels of funding to grow rapidly.  

Early Stage Growth Challenge Fund

The Early Stage Growth Challenge Fund will operate as a competition, where applications will be assessed and graded, with the highest-graded applicants receiving funding. A panel made up of Scottish Enterprise and private sector investors will assess the applications.

Deadline for applications

Applications for the Early Stage Growth Challenge Fund open on Monday 20 July and close on Friday 31 July. You can apply for the fund on the Scottish Enterprise website. In the meantime, you can read more information about the Fund on the Government’s website. More information will also shortly follow on the £3m grant pot, and how this can be accessed.

Here to help

If you have any questions relating to the above funding, please get in touch with me at:, I would be delighted to have a follow-up discussion about it. In the meantime, you can find out more about our Entrepreneurial Taxes Team here