Glasgow Business Transfer Loan Fund

The Glasgow Business Transfer Loan Fund is designed to support and encourage entrepreneurs, as well as business owners, to consider taking over existing businesses trading as viable going concerns. 

Business succession, whether in family or non-family firms, has the potential to make or break a company. Managed well, it can help a company sustain its competitive advantage.  Managed badly and it has the potential to see a business fail in a very short space of time.

"Historically, it has been large organisations that have had succession plans, not SME's. But, arguably, the inherent risks of not having a plan in place are the same for all companies, no matter their size."[1]

"Your time as the owner / manager of a small business could come to an end for a variety of reasons, such as:

  • you want to move on or retire
  • you suddenly become ill and unable to work

Planning for someone to take over from you will ensure that your business continues to run successfully in the future, even in your absence. In fact, succession planning is often called continuity planning because it's the way you plan for your business to continue."[2]

The 2012 Quarterly Survey of Small Business in Britain found that;

"In the event of serious illness or injury, three quarters of SME owners think that they could rely on fellow owners (44%) or staff (31%) to run their businesses. While a minority (16%) would expect to close the business in such circumstances, this proportion is much higher for the very smallest firms, rising to 48% for those who work on their own."[3]

The overall purpose of the programme is to safeguard jobs in Glasgow as a result of business failure through poor succession planning or lack of a coherent exit strategy.  The programme will not be targeted based on the number of companies supported, but rather on the number of jobs safeguarded.  By ensuring 200 jobs that would otherwise be lost to the City are secured, a conservative tangible saving of around £1.5m can be expected in terms of lost tax and national insurance, as well as other business related tax and insurances lost through business failure. 

In addition to safeguarding jobs, the programme will naturally create opportunities for growth, using existing foundations for new business owners to build on.

To ensure clarity when referring to business transfer, succession and transition, the context of these terms is based on the European Commission definition this is;

"Understood as a transfer of ownership of an enterprise to another person or enterprise that assures the continuous existence and commercial activity of the enterprise." 

A legal transfer of ownership will have to take place for any proposal to be considered.

The fund will also extend to, and support, transfer of ownership to existing employees through employee ownership models as well as supporting emerging co-operative business models where appropriate, re-enforcing the Council's commitment to becoming a co-operative Council.

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[3] P.2

Michelle Andrew


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