The Investment Fund for Scotland (IFS) provides finance options to support new and growing businesses in Scotland.

For example, IFS funding can help small businesses:

• fund expansion projects
• lease new commercial premises
• purchase assets
• hire a new team
• purchase new machinery or equipment
• launch a new product or service

The fund offers 3 commercial finance options:

• smaller loans of £25,000 to £100,000
• debt finance of £100,000 to £2 million
• equity investment of up to £5 million

The smaller loans are for new or growing businesses. You can borrow between £25,000 and £100,000 from the fund and pay it back with interest over an agreed period. The smaller IFS loans are managed by DSL Business Finance.

The debt finance option offers loans for businesses that can demonstrate growth potential. You can borrow between £100,000 and £2 million from the fund, then pay it back with interest over an agreed period. The IFS debt finance is managed by The FSE Group.

The equity finance option offers funding for businesses with ambitious plans for growth. Equity finance of up to £5 million is available and provides funding in exchange for part ownership of the business, such as selling shares. The IFS equity finance is managed by Maven.

The IFS is a £150 million investment fund operated by the British Business Bank. 

Note that the British Business Bank does not directly fund businesses. You will apply directly to the appointed fund managers. 

The fund managers will talk through your funding requirement and may ask for more information, a formal application or a pitch deck. They'll then evaluate your application and make the decision on funding.

To apply, your business must be based in Scotland or have significant activity there.

The fund is open to businesses from a range of sectors and at different stages, from start-ups to those with growth and expansion plans.

There are different eligibility criteria for the different finance options. The fund managers will be able to advise if an option is suitable for your business.

The costs vary depending on the type of finance you receive. 

For the smaller business loans and debt finance, you'll borrow money and pay it back with interest. The individual fund managers will advise on specific interest rates, arrangement fees and security fees on a case-by-case basis.

For equity finance, you'll receive funding in exchange for a stake in your business. The fund manager will advise on due diligence fees, arrangement fees and monitoring fees on a case-by-case basis.

Smaller businesses based in Scotland or with significant activity there.

The application and processing times will vary depending on the type of finance.

It can take between 4 and 6 weeks for smaller loan and debt finance, and between 8 and 12 weeks for equity finance, from the time you apply to the time you receive the funding.

These are approximate timings. It may take longer if you do not submit all the necessary information with your application.

The Investment Fund for Scotland is supported by Nations and Regions Investments Limited, a wholly owned subsidiary of British Business Bank plc. They are not authorised or regulated by the PRA or FCA. British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.

Visit the British Business Bank website for more information and to contact the fund managers.