By MALACHY TALLACK
A new bridging loan scheme agreed by Shetland Charitable Trust this week could prove hugely beneficial for community groups embarking on capital works projects in the isles.
The scheme would offer bridging loans to cover the cost of any capital projects where funding had already been offered by the government’s Scottish Rural Development Programme (SRDP). This money is not paid out until after work has been completed, so many groups have previously been forced to borrow money from banks at high interest rates to cover this gap.
The new loans from the charitable trust would be offered with no interest, and would have to be repaid within six months of project completion.
One of the first groups to benefit from the scheme is Bressay Sports Club, which has been offered £127,000 from SRDP towards the £300,000 cost of creating a new sports pitch.
Club chairman Kenny Groat said: “We found out that SRDP wouldn’t give us any money until they had the receipts in hand, so we would have had to go to a bank and that would have cost us a lot of money.
“This bridging loan from the charitable trust will enable us to get on with the project without incurring any extra cost.”
Other groups likely to receive help include Ollaberry Public Hall and Sandwick Social and Economic Development Company, which have both also been offered SRDP funding.
Sandness, Fair Isle and North Unst public halls and Burravoe and District Development Group have all submitted applications to SRDP, so may be eligible for bridging loans if successful.
Charitable trust chairman Bill Manson said: “We are delighted to be able to use Shetland’s community funds to help community groups with their cash flow to make sure they can achieve their aspirations at minimum extra cost to them and to the trust. That’s the sort of thing this money is for.”
Councillor Jonathan Wills proposed an amendment to the plan, arguing that the trust should charge a low level of interest on the loans. He was seconded by independent trustee John Scott, who added that the trust would be losing money on any funds removed from their investment portfolio.
However, the proposal was accepted without any further opposition, and loans will be offered interest-free. A budget of £500,000 has been set aside for the scheme.