Scottish Digital Development Loan - Building a Digital Nation
“The Digital Development Loan was created by the Scottish Government to provide loans to companies who wish to improve their digital capabilities and capacity.”
Fiona Hyslop MSP, Cabinet Secretary for the Economy, Fair Work and Culture
Do you need investment to improve your digital capability?
If so what would you do with an interest free (0%) loan of between £5,000 and £100,000 with a maximum repayment period of 5 years and no administration fees or early payment penalties to invest in your Digital Capability, Digital Capacity or Digital Skills?
That is what is currently on offer from the Scottish Government-backed Digital Development Loan. Whilst it has been around for a few years; it represents a tremendous opportunity during these difficult times.
The loan is designed to accelerate Scotland’s transition to a Digital Nation. And we’re keen you know about it.
Part of the process of applying for a Digital Development Loan is the inclusion, amongst other items of a Quote from a delivery partner.
As a Digital Agency, Inspire have delivered on many types of digital projects that have not only developed but enhanced immeasurably our clients’ digital capability, digital capacity and digital skills.
For the last 12 years Inspire have helped our clients develop, evolve and deliver on their digital strategies, be that through transforming their Business Process, Business Model, Domain and Culture/Organisation.
We are a team of Digital Strategists, Business Analysts, Software Engineers, Designers, Project Managers and Digital Marketers. We follow best practice in every aspect of our delivery and tailor our approach to Project Management e.g. PRINCE2 and Agile depending on each project.
We believe this puts Inspire in a perfect position to support those interested in embarking on their own Digital Transformation journey and becoming a part of Scotland’s Digital Nation.
To qualify for a Digital Development Loan, the purpose of your project has to satisfy any of the following:
- Improve your Digital Capacity
- Improve your Digital Capability
- Improve your Digital Skills
The application process is online and accessed via the Digital Development Loan website, where you can also find more detail about the application process and eligibility criteria.
The scheme most likely won’t be available forever – so the sooner you assess whether you’re eligible and apply, the better. Inspire are not the administrators of the loan and do not offer financial advice. However, if you want to simply discuss your digital project with us and get an understanding of potential costs, please fill in the form on this page to progress the conversation.
As AGENTS of DIGITAL TRANSFORMATION, Inspire are here to support your project delivery.
We hope the information below is helpful, this has been paraphrased from the Digital Development Loan website and added to following Freedom of Information requests.
For more information we’d advise those interested to discuss their project eligibility direct with Digital Development Loan.
Can the DDL be used for more than one project per company?
Essentially is it one loan per company with a limit of £100k? The maximum loan an SME can access is £100k; however this can be for more than one project as long the projects meet the eligibility criteria and the loan repayments are affordable to the business.
Source: Inspire’s Freedom of Information request
Can digital agencies apply for these loans to increase their own digital capability, skills and capacity?
Yes, digital agencies who meet the eligibility criteria can apply for a loan for their own business.
Source: Inspire’s Freedom of Information request
Who is the loan paid to? The applicant OR the digital agency?
Unlike the past (where previous Business Gateway grants have been paid direct to the digital partner), the Digital Development Loan is paid to the applicant, as ultimately it is the applicant who is responsible for the loan and the repayments.
Source: Inspire’s Freedom of Information request
Who is Eligible?
- Applicants must be located in Scotland.
- The business must be registered in Scotland as a Ltd company or the applicant must be registered with HMRC as a sole trader with a unique tax reference number ( UTR ), with the exception of Businesses or projects involved in betting or gambling or Loans for the purchase of property for resale.
- Applicants who have been trading a minimum of 6 months.
- Applicants must be over the age of 18.
- Applicants must be a UK resident with the right to work in the UK Businesses must meet the European definition of an SME.*
*European Definition: The category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro
Source: Digital Development Loan
What can it be used for?
- The loan can be spent on both hardware and software as long as it can be shown to increase the digital capacity and/or capability of the company
- New digital processes that enhance production or access new markets
- e-Commerce platform / software integration
- Staff training
What can it NOT be used for?
- Routine hardware and software upgrades.
- Standard expenses, staff wages, cashflow
- Marketing costs, including a brochure website and copywriting
- Digital marketing, including pay per click advertising
- Businesses or projects involved in betting or gambling
- Loans for the purchase of property for resale
- Payment of other outstanding loans
- Research & Development for new products for commercialisation
What is the Lending Policy?
Product Type: Business Loan for Existing SME’s including Sole Traders, Partnerships, Charities and Social Enterprises
- Minimum Loan: £5,000
- Maximum Loan: £100,000
- Minimum Repayment Term: 3 Months
- Maximum Repayment Term: 60 Months
- Interest Rate: Fixed at 0%
- No Administration Fee
- No Penalties for Early Settlement
- No security
Source: Digital Development Loan
What about Credit History?
- Applications will not be progressed if applicants are subject to formal insolvency such as sequestration/bankruptcy.
- Applicants who have defaulted on existing debts may still be considered for the Digital Development Loan if they can demonstrate that they have maintained regular repayments for a minimum of 6 months.
- Applicants who have discharged Bankruptcies and Trust Deeds are eligible to apply after the discharge date.
The money can be used to create a broad digital strategy for your business and with our years of experience in this area we can definitely help you with that.
We can support you in the relevant areas on the “permitted use” list, from designing and building your new e-commerce website, developing a translation facility, writing bespoke software for specific requirements.
It’s important to point out that whilst Inspire can support you in promoting your business online via content marketing and social media management, neither of these are considered an eligible expense.
Source: Digital Development Loan
Is a business plan required?
No, a business plan is not required, but the following is what you will need to complete the online Stage 1 of your application:
- Acceptance of Privacy Policy
- Application Form
- Summary of your company history and business activities (single page)
- Summary of the digital project (single page)
- Organogram or Organisation Chart
- Quote for the Project (this is where Inspire can support you)
- Accounts (2 most recent financial years)
- Last 3 months Management Accounts
- Cash flow projections for 12 months
- (For companies) a Board Resolution confirming you are authorised to apply on behalf of your organisation for the loan.
As the provision of a Quote is a pre-requisite of Stage 1, Inspire are offering their time on a no charge basis to work with you in creating this.
We’d love for you to consider Inspire as your digital delivery partner.
Just fill in the form at the top of this page to get in touch.
What are the assessment criteria?
Applications are assessed on how much the project delivers on:
- Increased capability (faster production, higher quality work etc.)
- Increased capacity (e.g. ability to take on new work)
- Increased digital skill within the workforce
Source: Digital Development Loan
How detailed should the application be?
The Digital Development Loan Scheme is looking for as much detail as possible on how the fund will improve digital skills in the workplace, profit, turnover etc.
Providing greater detail allows them to identify dated milestones that you expect to achieve so they can measure progress.
It is recommended you use a high level of detail as this increases the speed and the likelihood of the approval of the application.
What types of expenditure are likely to be accepted?
Examples of the types of expenditure that are likely to be accepted are:
- Training (does not have to be a recognised qualification)
- New digital processes to speed up production
- New digital processes which help to access new markets
- Use of a specialist to implement new systems
- New hardware or software which increases digital capacity and capability
Examples of expenditure likely to be rejected:
- Routine software or server replaces or upgrades
- Hardware and software considered normal for business activities
- Digital equipment not related to new digital processes
What's the typical length of the application process?
According to their website the Digital Development Loan Scheme suggest a decision can be made within six weeks after receiving your application.
They also advise that applications will take longer to process if they need to contact you for more information.
The application process has two stages:
- Stage 1: Company and Project Eligibility:
- Assessment of the applicant’s Digital Transformation Project, to ensure the purpose of the loan is to improve your ability to increase digital capability, capacity or skills.
- Stage 2: Financial Appraisal.
- Assessment of the applicant’s credit worthiness.
Source: Digital Development Loan
Am I still eligible if I already have a DSL loan?
Yes. The application takes into account any, and all, existing commitments you may have.
Is this fund only for start-ups?
As long as the business can provide evidence of over six months of trading, they are eligible.
Are employee costs eligible?
No, employee costs are not eligible unless proven to be essential for the implementation of the new project.
Source: Digital Development Loan
Can the loan repay already invested money?
No. The loan cannot be used for costs already incurred or used as additional finance for an already underway project.
Source: Digital Development Loan
Are charities eligible?
Yes, charities and other not-for-profit companies (such as social enterprises and community interest companies) are eligible, as long as they meet the eligibility criteria.
Source: Digital Development Loan
Am I still eligible if I am already engaged with Scottish Enterprise as a growth pipeline, high growth or account managed company?
Yes.
Source: Digital Development Loan
I am already receiving a grant, can I use the Digital Development loan to complete funding?
Yes, if you meet the eligibility criteria.
Source: Digital Development Loan
Does the proposed project spend require three quotes?
No.
The Digital Development Loan Scheme does NOT REQUIRE MULTIPLE quotes for the full loan amount applied for.
YOU ONLY REQUIRE TO PROVIDE ONE QUOTE.
We can help you with that.
We’d love for you to consider Inspire as your digital delivery partner. Just fill in the form at the top of this page to get in touch.
I have also received ERDF grant support, can I use this and a Digital Development Loan to fund the project fully?
The application process would consider situations like this on an individual basis; hence you’d be best to discuss this with the administrators of the Digital Development Loan Scheme.
Details here: http://digitaldevelopmentloan.org/
Is there security taken as part of the DDL funding?
There are no personal guarantees or securities taken for incorporated companies.
Source: Inspire’s Freedom of Information request
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