Funding Changes
Since the start of the Scottish EDGE competition in 2012, Scottish EDGE has received amazing support from Scottish Government, initially funding the full prize pot in the early rounds of the competition and continuing to fund the grant aspect as the competition progressed to offer blended awards (grant/loan split). As a strong purpose-led organisation, the Scottish EDGE Team and Board have continually had a desire to reduce our dependency on public sector funding. As such, for Round 18 onwards of the competition, the split for all Scottish EDGE awards (including special category awards) up to £100,000 will be 70% Loan / 30% Grant. Whilst this change helps Scottish EDGE’s drive towards self-sustainability, this also offers the winning businesses additional private-sector non-dilutive loan funding which can be utilised to grow their business but also match-fund other grant schemes where appropriate. All Young EDGE and Wild Card EDGE awards will remain as Grant only awards offering a top prize up to £15,000.
An example of the impact the 70/30 split will have on Scottish EDGE winners in comparison to the previous round is shown below:
Average award prize for Scottish EDGE category across Round 17 was £65,000. All Scottish EDGE awards are offered to winners across two equal tranches and on a £65,000 award, each tranche would be £32,500 which then has the loan/grant split attributed to it:
- Round 17 (50% Loan) – one tranche of the £65,000 award would be £32,500, of which £16,250 would be in the form of a loan. If the business paid the £16,250 back over 5 year at interest rate of 9.6% APR this would result in payments of £338 per month. These terms could then be replicated for the 2nd tranche of the award;.
- Round 18 onwards (70% Loan) – one tranche of the £65,000 award would be £32,500, of which £22,750 would be in the form of a loan. If the business paid the £22,750 back over 5 year at interest rate of 9.6% APR this would result in payments of £470 per month, which is an increase of £132 per month compared to previous round. These terms could then be replicated for the 2nd tranche of the award.
Flexible loan terms are offered for each winning business dependant on the stage of the business and these will be discussed with a Scottish EDGE Relationship Manager following a business’ announcement as a winner.
IMPORTANT – whilst flexible loans terms are offered to each of the Scottish EDGE winners, it is important that all businesses who apply for and could win an award that contains a loan element assess and confirm their ability to make repayments on an EDGE award loan and understand that loan repayments will commence one month following the receipt of any EDGE award funding.
In addition to each Scottish EDGE monetary award, each winner also wins a fantastic support package offering – details of which will be shared a the time of the award winner announcements.