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Covid-19 Response: Pivotal Enterprise Resilience Fund

This new fund was launched on 30 April to provide bespoke, needs-based grant awards for Scottish SME firms that can demonstrate they are vulnerable but can present a strong business case for a viable future. Firms need to prove that they are vital to the local, regional or national economy. The aim of the fund is to support these companies with working capital to help them continue trading or to come out of "hibernation" when the time is right.

What does this mean though and who can apply?

The qualifying process for grants from this fund will be much more subjective than those for the other coronavirus grant schemes. The key here is to define a pivotal enterprise and that could be down to different factors in different areas of the country.

The guidance explains this as follows: "Pivotal means different things in different regions and we will take that into account during the assessment. The application process will allow each applicant to make clear their contribution to the economy and their community. You may provide evidence of your unique status or links to key workers and key sectors such as food suppliers or how you are of integral importance to local communities. Successful applicants will be able to provide evidence of, or demonstrate impact in, one or more of the following areas:

  • Supporting Scotland’s productive capacity – through wage levels, employment, exports, Research & Development and innovation
  • Local economic importance which would include areas such as, employee numbers relative to place, delivery of essential services, wider economic and community value, plus the socio-economic importance of the business in remote and rural areas
  • Leverage on wider business community by demonstrating the impacts of your business on supply chain at a local, regional and national level
  • Being a supplier or potential supplier to NHS or other COVID-19 vital services
  • Being a supplier to other essential businesses
  • Demonstrating a need to rapidly scale up or diversify due to COVID-19"

Beyond the question of what is pivotal, every applicant must satisfy the following tests:

  • have fewer than 250 employees
  • have turnover lower than £43m or a balance sheet total less than £37.5m
  • was trading "successfully" prior to Covid-19
  • was not in financial difficulty at 31 December 2019 (see our comments on this on our BBLS page HERE)
  • can demonstrate that the funding will support the business to be viable
  • must have a business bank account

Applicants must start by completing the pre-application questionnaire found HERE. Following completion they will be sent an email with a link to the full application. During this process you will have to provide the following:

  • bank details (recent bank statement)
  • financial information including last year's turnover, latest accounts (can be management accounts), and a 12 month cash flow projection
  • information on other financial support including Covid-19 funding
  • an explanation as to why the business is pivotal to the local, regional or national economy (a brief outline of the wider contribution that your business makes to your local community or region of Scotland; this could include benefits that extend to other businesses, local supply chains, associated employment and wider social and community benefits; in addition, any benefits associated with increased R&D activity, innovation, export potential, increased productivity, diversity and equality, skills and training, supply chain opportunities and a net zero carbon economy could also be included)
  • information on how the grant will be used including how it will help to sustain or expand trading (the guidance states that the funds can be used to help plug a cash flow gap and to secure the business's future in the medium term; this can include payments for rent, wages, directors’ salaries, heat, light & power, materials, transport, financing costs, tax and other creditor payments)

The guidance states that levels of employment and wages going into the local area will be considered when assessing applications and prioritising funding and quotes as an example that companies employing less than 10 full-time equivalents (FTEs) in the city centres of Aberdeen, Edinburgh, Glasgow and Dundee are unlikely to be successful unless they can demonstrate a substantial impact on the city, regional or national economies.

If you are considering an application to this fund please contact Alan.

April 30, 2020

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