Business loans and grants in Scotland for limited companies

Public money for a Scottish limited company comes in two sizes, with very little in between: council grants of a few hundred to a few thousand pounds, and enterprise-agency loans and grants that start at £250,000. Three public loan schemes are open to an ordinary trading company. Business Loans Scotland, the fund that used to sit in the middle, stopped lending in 2024 – and you will still find it listed as open. Every scheme here was checked on 14 October 2026.

‍

What's open in Scotland right now, and what's closed

The three are the interest-free SME Loan and Cashback Scheme, the Investment Fund for Scotland, which lends from £25,000, and the Scottish Loan Scheme, which starts at £250,000.

The closures matter more, because they are the part other round-ups miss. Business Loans Scotland, a consortium of Scotland's 32 local authorities set up to lend to new and growing businesses, no longer makes new loans: the Scottish Government confirmed on 19 July 2024 that it would not fund the scheme any further. Two Scottish Enterprise routes have closed as well, and most council start-up grants changed shape in 2026 when the UK Shared Prosperity Fund ended.

Here is where the main schemes stood on 14 October 2026. Each links to its own official page, which carries the current rules and deadlines.

‍

Business Gateway is where to start, and it hands out no money of its own

Business Gateway is the publicly funded service that gives any business in Scotland free adviser support, and it's the sensible first call. It is not, though, a funder: it awards no grants or loans of its own, and its finance pages point you to Scottish Enterprise's grant calls, the Scottish Loan Scheme, and the King's Trust instead. Its advisers do run the application route for some council schemes, including Edinburgh's export grant and the Highland start-up grant.

Which enterprise agency handles you depends on where you trade, and it catches people out. Scottish Enterprise covers most of the country, but not the Highlands and Islands, which Highlands and Islands Enterprise serves, or Dumfries and Galloway and the Scottish Borders, which belong to South of Scotland Enterprise.

‍

The public loans a Scottish company can actually borrow

Public money is slower than commercial money, and all three of these routes will ask for more paperwork than a lender would. What you get in return is a much lower cost, and in one case no interest at all.

‍

Interest-free money for energy work

The SME Loan and Cashback Scheme is the only interest-free public loan a small Scottish company can get. It lends up to £100,000 for renewable or energy-efficiency work, the Scottish Government funds it, and Energy Saving Trust runs it. With the cashback on top you can take up to £130,000 in total: a 75% cashback grant of up to £10,000 towards a renewable heating system, and a 75% cashback grant of up to £20,000 towards energy-efficiency measures. Every loan runs over eight years and is unsecured, and you can ask for a shorter term.

Two conditions matter more than the numbers. You need a free Business Energy Scotland report before you apply, and you must not start work, pay a deposit, or buy materials for the measures you've applied for before you have a written loan offer. Business Energy Scotland says these rules 'are strictly enforced and cannot be appealed', which is an expensive thing to learn late. Otherwise it's straightforward: you need to be based in Scotland, trading for at least 12 months with one set of accounts, and have fewer than 250 full-time staff. Applications run all year while the money lasts, and a decision follows within 10 working days.

‍

The Investment Fund for Scotland lends from £25,000 to £2m

The Investment Fund for Scotland is a £150m British Business Bank fund, and for most readers of this page it is the realistic public route. It covers the whole country, including rural and coastal areas, and it lends through appointed managers rather than directly, in three tiers:

• Smaller loans of £25,000–£100,000, through DSL Business Finance, a not-for-profit lender based in Glasgow.
• Debt finance of £100,000–£2m, through The FSE Group.
• Equity of up to £5m, through Maven.

Because the British Business Bank doesn't fund businesses itself, you apply to the fund manager, and the bank says decisions take four to six weeks on the two loan tiers. Worth knowing before you plan around it: DSL publishes its own terms for the smaller loans, and they are real commercial terms. Up to 60 months, interest fixed at 10% to 14% a year, a 2% arrangement fee, a bond and floating charge over the company, and a personal guarantee.

‍

The Scottish Loan Scheme starts at £250,000, and rules several sectors out

The Scottish Loan Scheme is the one most Scotland funding pages lead on, and most companies reading those pages can't use it. It lends £250,000 to £2m, typically over one to seven years, and to qualify you need two years' trading, a turnover of at least £250,000, and profit or a credible profit forecast within 12 months. You also have to show you have tried other funders, and support fair work practices including paying the Living Wage.

The rate 'will be determined by assessment of risk and available security', there's a 1% arrangement fee, and your company pays the diligence and legal costs. Security is 'typically Bond and Floating Charge', with 'no requirement for personal guarantees' – unusual at this size, and the scheme's best feature.

Then there is the part most round-ups leave out. Your company may be ineligible if it works in:

• retail, events, restaurants, hotels, pubs, or clubs
• professional services
• social and personal services
• motor vehicles
• real estate or property development
• banking, insurance, sub-prime lending, hire purchase, or dealing in land, derivatives, or commodities

Scottish Enterprise does say a technology company, or one with a genuinely disruptive business model, can still be considered.

‍

Start Up Loans are personal loans, at 7.5% since April 2026

Start Up Loans are worth being precise about, because the rate changed and almost every page about them still shows the old one. They are government-backed personal loans of £500 to £25,000 per owner at a fixed 7.5% a year, with a representative rate of 7.8% APR. The rate rose to 7.5% on 6 April 2026.

The more important point is who borrows. A Start Up Loan is a personal loan for business purposes, so the director borrows and the director is liable, not the company. It is unsecured, with no assets or guarantors needed. Every owner or partner can apply, up to £100,000 per business, over one to five years, with no set-up fee, no early repayment fee, and 12 months of free mentoring afterwards. Your business needs to have been trading for less than 60 months, a limit that also moved on 6 April 2026. In Scotland, DSL Business Finance is the official delivery partner.

Start Up Loans sit alongside the other government-backed business loans available across the UK. Private start-up business loans work the other way round: the company borrows, not you.

‍

Scottish grants are small and local, or very large

Grants follow the same shape as the loans, and they are harder to reach. A council will award a few hundred to a few thousand pounds, Scottish Enterprise won't consider a grant below £250,000, and three of the best-known names in between turn an ordinary trading company away. Scottish companies can also apply for UK-wide small business grants, such as Innovate UK competitions, on the same terms as everyone else.

‍

Council grants were rebuilt when the UK Shared Prosperity Fund ended

If a funding page lists a council grant and doesn't say when it checked, assume it is wrong. The UK Shared Prosperity Fund paid for most council start-up grants in Scotland and it ended in March 2026; the UK Local Growth Fund replaced it, and councils have been relaunching their schemes under new names and new amounts ever since.

Here is where six councils stood on 14 October 2026.

• Renfrewshire runs a Business Development Grant of £1,000 to £10,000 at 50% match funding, for businesses working from commercial premises. It's competitive and discretionary, and it's open.
• Edinburgh offers an Export Support Grant of up to £2,000 for a trading company headquartered in the city, applied for through a Business Gateway adviser. The city also backs the East of Scotland Investment Fund, a match-funded loan of up to £50,000 for a limited company or limited liability partnership that can show a funding gap.
• Orkney gives a New Business Start-Up Grant of £500 to £1,500, open all year, for a business trading under six months whose owner lives in Orkney and runs it themselves. The council says the grant 'will never act as the sole funder'. Its Flexible Business Development Grant pays 50% up to £5,000 for an established business.
• The Highland Council lists a £1,000 start-up grant delivered by Business Gateway Highland. Its page still describes the money as UK Shared Prosperity Fund, so check with the adviser before you count on it. The council also owns a loan company, Highland Opportunity (Investments), reached the same way.
• West Dunbartonshire gives a Business Start-Up Grant of up to £500 year round, and a Business Development Grant of 50% up to £2,000 for established businesses. Its page describes the start-up grant as help for individuals, so ask how it treats a limited company.
• Aberdeen City's Business Start-Up Grant has gone: the scheme page has been removed and it's no longer listed on Find Business Support. Start from the council's grant funding support page instead.

‍

Scottish Enterprise funds projects of £1m and up

Scottish Enterprise is the national economic development agency, and its grants are not for small projects. It won't consider a grant below £250,000, and it expects a project representing at least £1m of company spend, which rules out most of the companies that go looking for one. Research and development grants cover 35% to 50% of eligible costs for a small or medium-sized company, and its capital grant covers up to 40% for a small company and 30% for a medium-sized one, on projects lasting 6 to 36 months.

Highlands and Islands Enterprise, which covers that region instead, gives grants rather than loans, whatever you may read elsewhere: £2,000 to £10,000 for a Technology Kickstart Grant, £10,000 to £25,000 for technology development, and up to £100,000 for research and development. Its Digital and Technology Adoption Capital Grant is paused until the end of October 2026. Retail, hospitality, personal services, and professional services are generally ineligible, and every award is discretionary.

‍

Three well-known funds that aren't open to a trading company

They are Social Investment Scotland, Start It, and the King's Trust, and it is worth knowing that before you spend an afternoon on an application. Social Investment Scotland lends £25,001 to £375,000 from its Community Finance Fund and £100,000 to £500,000 from the Scottish Social Growth Fund, but only to charities and social enterprises. Start It gives up to £5,000 and says plainly that it 'funds you rather than the business', for an individual starting a social enterprise that isn't trading yet. The King's Trust gives up to £30,000, made up of a grant of up to £5,000 and a loan of £500 to £25,000, to people aged 18 to 30 who aren't trading yet or have traded for under a year.

‍

Scottish EDGE reopens in early 2027

Scottish EDGE is the best award in Scotland aimed squarely at limited companies, which is why it's worth knowing when it comes back rather than just that it's shut. The latest round has ended, round 29 opens in early 2027, and Regional EDGE reopens in January 2027.

Its Young EDGE and Wild Card EDGE awards are grants of £10,000 or £15,000. The main award is part grant and part loan, with the loan element at 5% fixed flat-rate interest over a maximum of five years and no personal guarantees or other security. To enter you need a company incorporated at Companies House, headquartered in Scotland, trading for under five years, with turnover of £1m or less.

‍

What a commercial lender will offer you

Most Scottish companies are already borrowing somewhere. The British Business Bank's Scotland SME Access to Finance Report, published in January 2026, found that 69% of small businesses in Scotland were using external finance in late 2025, the highest of the devolved nations, and that only 13% reported a barrier to getting it, down from 42% a year earlier.

What a commercial lender offers you in Scotland is what it offers anywhere in the UK. Secured business loans use business assets as collateral: rates are usually lower, but applications take longer and the criteria are tighter. An unsecured business loan needs no business assets as collateral, so it's quicker to arrange and usually priced higher, because the lender carries more of the risk. Working capital loans cover day-to-day costs, bills, and tax, and often smooth out a seasonal dip or the first few months of a new hire's salary.

If the pressure is in the timing rather than the total, the options change. Invoice finance advances part of the value of an invoice you're still waiting on, a business line of credit lets you draw against a pre-agreed limit and top it up as you repay, inventory finance is secured against stock, and a merchant cash advance is repaid as a share of your card sales. All four are ways of managing cash flow rather than funding a one-off purchase.

‍

The lenders that serve Scottish companies

Any UK business loan provider can lend to a company based in Scotland, and two high street banks publish Scotland-facing small business loans. Bank of Scotland lends £1,000 to £50,000 as a secured or unsecured loan, at a fixed 11.2% APR representative on that range. Royal Bank of Scotland lends £1,000 to £100,000 over one to seven years, with a 12.63% APR representative on loans of £10,000 to £19,999, and says a personal, director or member's guarantee may be required.

Scotland also has public and not-for-profit lenders. DSL Business Finance, the not-for-profit lender in Glasgow, delivers both the Investment Fund for Scotland's smaller loans and Start Up Loans. The Scottish National Investment Bank invests in businesses 'seeking more than £1m in investment support', as debt or equity, and gives no grants at all, so it isn't a route for a smaller request.

The Growth Guarantee Scheme sits across much of this. It's a British Business Bank scheme, open on 14 October 2026, that gives an accredited lender a 70% government-backed guarantee on facilities of up to £2m. Read that carefully, because it is widely misunderstood: the guarantee protects the lender, not you. You stay 100% liable for the debt.

‍

The money you need before the grant arrives

Nearly every Scottish grant does two things that decide whether it is any use to you. It pays part of the cost, and it pays in arrears – after you have paid your suppliers and can prove it. Renfrewshire's Business Development Grant, for example, pays 50% of a project you have already settled.

Say your company buys £20,000 of equipment with a 50% grant behind it. The grant covers £10,000 and your company covers the other £10,000, so on paper you need half the money. In practice you pay the full £20,000 to your suppliers first, then claim your £10,000 back with proof of payment. That is the number to plan around, and it is the one the application form doesn't ask you about.

There are three ways to cover it, and each suits a different company. Your own cash is the cheapest, and assessors like to see it, but it ties up money you may need for wages and stock. A public loan, such as the energy scheme or the Investment Fund for Scotland, charges little or nothing and is built to sit alongside a grant, but it is slow: four to six weeks for the Investment Fund for Scotland, and the energy loan needs its report first. A commercial loan costs more and some schemes restrict borrowed match funding, but it is the only one of the three that arrives in days.

A grant doesn't have to be repaid and a loan does, so it's worth seeing how grants and loans compare before you commit to either.

‍

Pay the supplier now, claim the grant later

Borrowing the whole project cost for a few weeks and clearing it when the claim lands is the usual way round an arrears-paid grant.

Our Flexi-Loan is built for that shape of gap. You choose a fixed term of between 12 months and five years, so you know the repayment schedule from the outset. Because there's no fee for repaying early, you can clear it as soon as the cash arrives – many of our customers only take out our finance for a few weeks, or even days. You also have 30 days to draw the money down once we've approved it, so you can line the funding up before you place the order and start paying interest only when you spend it.

Flexi-Loan in action: The Building Co. When The Building Co. landed a new project during a quieter period, founder Ray Iqbal needed to buy specialist equipment quickly. iwoca approved and funded Ray within 48 hours, helping him take on the opportunity without putting pressure on cash flow. Read Ray's story

There's a second reason a Scottish company ends up with a commercial lender, and it's that gap in the middle again. Above £100,000 the public options thin out: the Investment Fund for Scotland's smaller loans stop there, and the next tier up is the Scottish Loan Scheme, with its turnover and profit tests. Our own SME Expert Index, published in May 2025, found that 67% of finance brokers recommend alternative lenders for loan applications over £100,000, against 6% who recommend high street banks.

All of this bites hardest if your income is seasonal or your cash buffer is thin, and on capital projects where the grant only pays once every invoice has been settled.

‍

What you sign up to with a Flexi-Loan

• How much: £1,000 to £1m, over up to five years.

Repaying early: you can repay early at any time, with no early repayment fee.

• Decision: a decision is made within 24 hours, but it might be longer depending on the complexity of the request, because our credit team reviews larger applications.
• Personal guarantee: as a new customer, at least one director gives a personal guarantee. This makes them personally responsible if the company can't repay.
• Who can apply: we lend to UK limited companies.

A quick decision isn't a light one. Before we make an offer, we look at your revenue and what your business can afford to repay.

If you want to know where you stand before applying for any kind of funding, iwoca Credit Compass is free and shows your Equifax business credit score plus four more scores, with areas to improve.

‍

Scottish business funding FAQs

What government loans are available for businesses in Scotland?

Three government-backed loan routes are open to a Scottish limited company: the interest-free SME Loan and Cashback Scheme for energy projects, the Investment Fund for Scotland from £25,000 to £2m, and the Scottish Loan Scheme from £250,000. Start Up Loans are government-backed too, but the director borrows rather than the company.

‍

Can I combine a grant with a loan?

Usually yes, as long as the scheme's rules allow it. Several Scottish schemes expect match funding from somewhere, and a few set conditions on where it comes from, so check before you arrange the borrowing.

‍

Can I get a business loan in Scotland without collateral?

Yes. An unsecured business loan needs no business assets as collateral, and it's the usual route for a company that doesn't own property or heavy equipment. Lenders price that extra risk into the rate, and many ask a director for a personal guarantee instead of security.

‍

Which business loans are easiest to get in Scotland?

Your trading history decides it, far more than the lender's name. Public schemes set the strictest written criteria, as the Scottish Loan Scheme's turnover and profit tests show, while online lenders usually decide faster on less paperwork.

‍

Are there similar schemes in Wales and Northern Ireland?

Each nation runs its own. See our guides to business grants in Wales and business grants in Northern Ireland.