Liquidity Support Fund for SME Housebuilders: FOI release

Information requested

Follow up questions and clarity to the response relating to 202300387605.

1. I don't understand answer 3. It states that 33 out of 38 defaulted but that 27 out of 38 have fully repaid. How can that be? Can you clarify please?

2. Can you also please clarify the total amount of money that has been lost through companies defaulting on this loan?

3. Were any of these loans unsecured?

4. Finally, what steps have been taken to recover unpaid loans from defaulting companies?

5. I am looking to establish if tax payer money has been lost through this scheme and if so, how much?

Response

The answer to your questions are:

1. Default on a loan occurs when the borrower has failed to honour the terms of their loan agreement. After a default, a loan can still go on to be fully repaid.

2. No loans have been written off relating to this Fund.

3. Security of loans were assessed on a case-by-case basis, but security was not a pre-requisite for being awarded a loan. Of the 38 loans awarded, the majority of these had some sort of security offered such as land, property, bonds, floating charges, guarantees etc. A total of four loans had no security offered and were therefore unsecured.

4. Where a loan is in default and following a default process when reminders have not been successful, solicitors acting on behalf of the Scottish Government engage with the borrower.

5. No outstanding balances awarded through the SME Liquidity Fund have been written off.

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