With all construction work in Scotland halted, Scottish Government has launched a £100 million emergency loan fund for SME housebuilders, to support them during the Coronavirus crisis.
Housebuilders can apply for short-term loans of up to £1 million to help them navigate any liquidity issues that stem from the temporary cessation of the housing market.
The emergency loan fund is designed to:
- safeguard jobs and protect suppliers
- support post-COVID-19 economic recovery and the continued
- supply of homes
- retain diversity of the housebuilding sector
The emergency scheme is open to SME housebuilders from 14:00 on Monday 18 May on the Scottish Government website, as long as they meet the criteria:
- they are an existing business in Scotland which has been directly affected by COVID-19
- their turnover is less than £45 million and they are building five or more homes per annum
- their business was financially viable before COVID-19
- funding cannot be secured from existing lenders or their own resources to meet liquidity needs
- the business has been unable to secure sufficient funding from UK Government or other Scottish Government COVID-19 schemes
They should only apply for funding that is necessary for the short term. They will be asked to explain why existing support mechanisms are not sufficient for their business.
Loans are available between £50,000 to £1 million, with most loans expected to be repaid within two years with interest rates set at 2%.
Housing Minister Kevin Stewart said: “To save lives and protect the NHS during the coronavirus outbreak all non-essential construction work has been halted. This decision was not taken lightly and I know it is having a profound impact on the housebuilding sector, particularly smaller businesses which are struggling to cope with delayed house sales and the increased costs associated with site shutdowns.
“This new loan fund is open to small and medium-sized housebuilders operating within Scotland. It will provide urgent support to address liquidity pressures facing housebuilders and will help ensure their future.
“I would like to thank everyone in the sector for their support during the coronavirus pandemic and assure them that the Scottish Government is committed to safeguarding jobs and putting plans in place to ensure economic recovery over the months and years ahead.”
Homes for Scotland Chief Executive Nicola Barclay said: “This welcome short-term intervention will offer a lifeline for many smaller home builders who play a major role in their local areas in terms of meeting more rural housing need, investment, employment and sustainability.
“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.”