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Virus loans for builders

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House builders in Scotland will soon be able to apply for short-term loans of up to £1m from a Scottish Government virus fund.

Small and medium-sized enterprises (SMEs) with liquidity issues due to Covid-19 shutdowns can ask for a share of the £100m emergency fund designed to safeguard jobs, protect suppliers and support post-virus economic recovery.

Housing minister Kevin Stewart said he was aware the closure of non-essential construction sites was having a profound impact on the sector, particularly smaller businesses which are struggling to cope with delayed house sales and the increased costs associated with shutdowns. “This new loan fund is open to small and medium-sized house builders operating within Scotland. It will provide urgent support to address liquidity pressures facing house builders and will help ensure their future.”

Describing the move as a “welcome short-term intervention”, Homes for Scotland chief executive Nicola Barclay said it would offer a lifeline for many home builders. She added: “Of course, their longer-term survival depends on a safe phased return to work and we continue our close engagement with the Scottish Government on how this can be achieved as soon as possible.”

SME house builders will be able to apply for loan support from 14:00 on Monday May 18 when details will be available on the Scottish Government web site. Applicants should have a turnover of £45m or less per year and be building five or more homes a year.

Companies have been warned to apply only for funding that is necessary for the short term and will be asked to explain why existing support mechanisms are not sufficient. Loans are capped at £1m and most are expected to be repaid within two years with interest rates set at 2%. Minimum loan is £50,000.

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©Scottish Plant.  Article posted 6/5/2020