Guidance notes for applicants

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 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.

How do you define a vital or pivotal enterprise?

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

Essential eligibility criteria

• Companies with up to 249 employees that have been trading successfully prior to Covid19
• Less than £43.689 million turnover or balance sheet total of £37.572 million
• Can demonstrate the funding will support the business to be viable
• Not in financial difficulty before 31 December 2019
• Must have business bank account

For the Pivotal Company Resilience Fund, applicants must provide:

• Bank Details (You will be asked to upload a copy of a recent bank statement that is less than 3 months old and shows: account name, sort code and account number)
• Financial information including turnover figure from last year 
• Last audited accounts if available or latest management accounts
• 12 month cash flow projection (a template will be provided)
• Information on other financial support including COVID-19 funding
• Explain in what way you are pivotal to the local, regional or national economies
• Information on how the grant be used and how it will help sustain or expand trading

Other important information for the Pivotal Company Resilience Fund:

• Levels of employment and wages going into the local area will be considered when assessing applications and prioritising funding.  This means, for 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.
• Only one application will be accepted per company or group regardless of  the number of branches, subsidiaries or parent bodies
• Human Rights Due Diligence checks will be required for grant applications over £100,000.
• Grant should be for working capital to help meet a cash flow gap and secure your future in the medium-term. These can include payments for rent, wages, directors’ salaries, heat, light & power, materials, transport, financing costs-VAT/HMRC, creditor payment.
• The grant can augment other funding from Government and other sources.

Demonstrate that you are vital to the local, regional or national economy:

In this section of the application form, you should provide a brief outline of the wider contribution that your business makes to your local community or region of Scotland. As above, 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.

This Fund is for small creative, tourism and hospitality companies that are experiencing hardship. The focus is to help companies manage cashflow commitment for the next three months, including those furloughing staff. 

Grants of up to £25,000 can be accessed in addition to the Coronavirus Job Retention Scheme.

Essential eligibility criteria

• Companies with up to 49 employees
• Experienced at least a 50% loss of current or projected revenue
• Not in financial difficulty before 31 December 2019
• You cannot be in receipt of other COVID-19 government grant support, apart from the Furlough Scheme or self-employment income support
• Not for pre-revenue companies
• Must have a business bank account

For the Creative, Tourism and Hospitality Enterprises Hardship Fund companies must provide:

• Company information
• Bank Details (You will be asked to upload a copy of a recent bank statement that is a less than 3 months old and shows: account name, sort code and account number)
• Financial information including turnover figure from last year
• 3 month cash flow projection (a template will be provided)

The grant is needs based. Successful applicants will be able to provide evidence of or demonstrate:

• Financial hardship due to COVID-19

To allow us to check you are eligible for the funding you will be asked to provide one of the following:

• Registration Number - provided by Companies House (CRN), Charities Commission, Mutuals, Public Register and other statutory and regulatory bodies that you must file accounts and annual membership details with.

Or

• UK VAT Number – If you are VAT registered, supply your number.

Or

• Unique Tax Reference Number - If you do not have a Company Registration Number or a VAT registration number as detailed above, you should provide your HMRC Corporation Tax Unique Taxpayer Reference or HMRC Self-Assessment Unique Taxpayer Reference, as appropriate for your entity. You will be asked to scan and upload a copy of this document.

You will be asked to provide your full-time equivalent (FTE) job numbers:

• a full-time job is one of 30 hours or more per week
• a part-time job is one of at least 15 hours per week
• two part-time jobs count as one full-time equivalent job
• we do not accept zero-hour contracts as eligible permanent jobs

You will be asked to provide various pieces of financial information including your turnover figure from last year. You will be asked to complete a cash flow template and asked to upload your latest accounts that have been filed. You will also be asked for your latest management accounts that cover the period to date that are not covered by the latest accounts that have been filed.

For those applying for the Pivotal Enterprise Resilience Fund, this section should provide a brief outline of the wider contribution that your business makes to your local/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.

You will be asked if you are or are committed to becoming a Fair Work First employer. Fair Work First means investment in skills and training, no inappropriate use of zero hours contracts, action on gender pay, genuine workforce engagement, including with trade unions, and payment of the real Living Wage. The real Living Wage is currently £9.30 per hour and is based on the cost of living. More information can be found at https://scottishlivingwage.org/

You will be asked to confirm you are a Micro, Small or Medium Enterprise. The definition of these are set out below:

Micro-business

• fewer than 10 full-time equivalent employees; and either
• an annual turnover of no more than €2 million; or balance sheet total of no more than €2 million.

Small enterprise

• fewer than 50 full-time equivalent employees; and either
• an annual turnover of no more than €10 million; or balance sheet total of no more than €10 million.

Medium enterprise

• fewer than 250 full-time equivalent employees; and either
• an annual turnover of no more than €50 million; or a balance sheet total of no more than €43 million.

We can only accept one application per company or group if you have different branches, subsidiaries or parent bodies.  If you are part of a group, to calculate the overall SME qualification you must combine the data (staff FTEs, turnover and balance sheet from last approved accounts) for each of the following:

• Enterprises that have a shareholding of between 25% - 50% in your enterprise or in which you hold a 25% -50% shareholding (add the relevant percentage for each to 100% of the main applicant data)
• Enterprises that have a shareholding of 50.1% or above in your enterprise, or in which you hold a 50.1% shareholding, are considered linked by majority control and 100% of the data of each must be combined.
• The same principle applies if a majority control (over 50.1%) is exercised through voting rights, legal or contractual rights that exercise a dominant influence.
• You are only considered an SME if the combined data is still with the thresholds.  You must be no more than 249 combined employees but one or other of turnover (€50 million) or balance sheet total (€43 million) can be exceeded.
• If you have just exceeded the SME threshold in the last year due to an exceptional year, you could still qualify, if this was just temporary.

For further guidance refer to the European Commission’s User Guide to the SME Definition.

• Director: a registered director of a company;
• Trustee: a registered trustee of a charity;
• Partner: a designated partner/member of a limited liability partnership or a legal partner within a business;
• Proprietor: owner of a business.

Information on all grant awards will be published on the European Commission Competition database. Information on all grant payments over £25,000 will also be published on the Scottish Enterprise website. This is required to comply with our legal obligations.

Scottish Enterprise is subject to the Freedom of Information (Scotland) Act 2002 and may be obliged to release information about your application or grant award in response to any requests received.

Confirmation of State aid received under the Covid-19 Temporary Framework for UK Authorities measure and Undertaking in Difficulty Status

Following the outbreak of the Coronavirus, the European Commission has approved schemes to aid businesses affected by the Coronavirus outbreak on the basis of their Temporary Framework, including the Covid-19 Temporary Framework measure for the UK. The maximum level of aid that a company may receive is €800 000 (€120,000 per undertaking active in the fishery and aquaculture sector or €100,000 per undertaking active in the primary production of agricultural products). This is across all UK measures under the terms of the European Commission’s Temporary Framework.

Provide details of any other funding your business has received

In your application you are required to declare any aid already approved under the Temporary Framework. The Euro equivalent of the Sterling aid amount is calculated using the Commission exchange rate applicable on the date the aid is offered. Daily rates can be found here. 

Any aid provided under this measure will be relevant if you wish to apply, or have applied, for any other aid based on the European Commission’s Temporary Framework. You will need to declare this amount to any other aid awarding body who requests information from you on how much aid you have received. You must retain the award letter for four years after the conclusion of the UK’s transition from the EU and produce it on any request from the UK public authorities or the European Commission.

Aid may be granted to undertakings that were not in difficulty (within the meaning of Article 2(18) of the General Block Exemption Regulation on 31 December 2019, but that faced difficulties or entered in difficulty thereafter as a result of the Covid-19 outbreak. This aid is in addition to any aid that you may be have received under the De Minimis regulation allowing aid of up to €200,000 (€30,000 per undertaking active in the fishery and aquaculture sector or €20,000 per undertaking active in the primary production of agricultural products) to any one organisation over a three fiscal year period (i.e. your current fiscal year and previous two fiscal years), and any other approved aid you have received under other State aid rules, such as aid granted under the General Block Exemption Regulation.

Source: Section 2(18) General Block Exemption Regulations

In your application you will be asked to declare that on 31 December 2019, you did not meet any of the criteria to be considered an undertaking in difficulty.

2 (18) ‘undertaking in difficulty’ means an undertaking in respect of which at least one of the following circumstances occurs:

(a) In the case of a limited liability company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, ‘limited liability company’ refers in particular to the types of company mentioned in Annex I of Directive 2013/34/EU (1) and ‘share capital’ includes, where relevant, any share premium.

or

b) In the case of a company where at least some members have unlimited liability for the debt of the company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses. For the purposes of this provision, ‘a company where at least some members have unlimited liability for the debt of the company’ refers in particular to the types of company mentioned in Annex II of Directive 2013/34/EU.

and

(c) Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors.

and

(d) Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee or has received restructuring aid and is still subject to a restructuring plan.