Shetland Islands Council

Economic Development Grant Scheme (Shetland)

Shetland Islands Council's Economic Development Grant Scheme gives £1,000 to £25,000, up to 50% of eligible costs, towards projects that start or grow businesses in Shetland or bring local economic benefit. It is open to small and medium-sized businesses and to Shetland-based voluntary and community organisations. Capital and revenue costs can both be funded, but the grant is only the minimum needed for the project to go ahead, and applicants must look for other funding first.

Apply on the funder’s site

You could get: £1,000 – £25,000; no fixed round
Deadline: Rolling; apply any time
Effort: Heavy; budgets, references, often several stages

Who can apply

Sole traders, partnerships, limited liability partnerships and limited companies starting up or growing a business in Shetland, which must meet the UK Government definition of a small to medium-sized enterprise (SME)
Voluntary and community organisations can apply for development projects that bring economic benefit to the local community; they must be Shetland-based with an open constitution or similar rules setting out their aims, objectives and procedures
Applications should come from a ZE postcode, though projects from outside Shetland may be considered if they show viable inward investment potential
The grant covers up to 50% of eligible costs; private businesses are expected to put in at least 25% of their own funds, and all applicants must show where the rest comes from
Applicants must show reasonable financial health (the council may run credit checks), follow fair work practices, and say what they are doing to reduce carbon emissions
Generally only one grant per applicant in any 12 months

What it funds

Projects which demonstrate delivery of one or more of these key outcomes:

Introduce new business activity: projects which develop business activity new to Shetland, including new products, services or operations
Improved product quality: new processes and techniques, or investment in equipment and infrastructure
Sustainable use of resources: projects which use resources more sustainably, adopt circular economy principles and support the transition to net zero
Import substitution: investments which reduce reliance on products and services imported into Shetland
New market development: expanding distribution and marketing channels into new market segments
Improved productivity: new or improved manufacturing processes, innovative technologies, or other improvements such as workforce development
Improved service delivery: new processes, systems and technologies which improve customer interactions
Eligible costs include buildings (construction costs, upgrades/improvements and associated professional fees), new equipment, professional fees (e.g. consultancy, architecture), consents and permissions, salary costs, volunteer expenses and non-recoverable VAT

What it will not fund

Projects which displace or duplicate existing activity in the local marketplace, or are to the detriment of existing local businesses, organisations or projects
Projects which cannot demonstrate links to the scheme outcomes
Businesses deemed to be failing, and projects which function as rescue packages
In general, retail projects solely serving the local market (exceptions may include a retail element to a manufacturing development)
Self-catering, bed and breakfast, guest house and hotel accommodation (caravan parks and campsites may be considered where there is demonstrable local need)
Projects relating to healthcare procedures, physical therapy, beauty or cosmetic personal procedures
Projects eligible for other Council grant schemes (except community group and social enterprise projects that may also be eligible for the Coastal Communities Fund)
Projects taken forward solely to meet statutory requirements
Core running costs
Continuation of ongoing revenue projects
Purchase of land and buildings
Political or religious activities
Loan repayments, service charges on finance leases, hire purchase and credit arrangements
In-kind costs and contributions
Repair and maintenance
Securing intellectual property rights, i.e. patents and copyright
Property redecoration
Legal fees
Wage subsidy
Vehicles
Direct replacement of existing assets
Acquisition of an existing business, or a management buy-out/in
Any costs incurred or committed before a formal offer of grant

How to apply

Contact the Economic Development Service to discuss your project, using the online enquiry form (the council aims to respond within 5 working days)
Officers check whether you need other business support, such as Business Gateway Shetland
If the project meets the criteria in principle, you are invited to submit a full grant application form
The council carries out due diligence and gives feedback before the application is assessed
The Executive Manager - Economic Development makes the final decision; successful applicants sign and return a grant offer letter

Do not start work or commit to costs before a formal grant offer. There is no appeal against a rejection. Grant conditions normally apply for 6 years.

Have ready

Business plan or project plan
Quotes or tenders for project costs
Up to 3 years' annual accounts
Most recent bank statement
Governance document
Protection of Vulnerable Groups policies and procedures
Job profile and person specification (revenue projects)
Evidence of rights to land or facility (capital projects)
Permissions and statutory consents required
Match funding sources (including own funds)

Officers advise which of these each project needs. Grant requests over £10,000 normally need a full business plan with at least 3 years of financial projections, including monthly cashflow forecasts.

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