Not a single company is defaulting on emergency loans granted by East Lothian Council in lockdown


NOT A single company that received an emergency loan from East Lothian Council in the first month of lockdown has defaulted on payments, a new report has revealed.

In a record dubbed “remarkable” by one councillor, East Lothian Investments Ltd (ELI) said it handed over more than £70,000 to businesses in the first month of lockdown and has not defaulted on payments almost two years later.

The company, set up by East Lothian Council and providing interest-free loans to start-ups/county-based businesses, said it launched a business interruption loan in March 2020 to help businesses with severe cash flow problems impacted by the blocking was caused.

It gave £70,200 to companies in loans of up to £5,000 with a six-month repayment holiday and a 24-month repayment grace period.

A report by the company to the Council’s Audit and Governance Committee this week revealed that the loans went to retail, hospitality and social enterprise companies, among others.

Richard Baty, the council’s corporate chief, told the meeting: “As of January 2022 there are no loan defaults, a credit holiday is in effect and one company has entered a non-Covid related debt settlement programme.”

Councilor Stuart Currie said the result was “remarkable”.

He said: “That’s quite remarkable given the current circumstances and I don’t think it’s an accident.

“It shows the due diligence of Mr. Baty and the team.

“It’s not about picking winners, it’s about picking good prospects and I think that’s key.

“Frankly, so much money has gone to anyone who says, ‘Hi, I’m a company.'”

Mr Baty told the committee that since ELI was set up in 2001 it has made more than £3.2million in loans to 367 local businesses, created 878 new jobs and protected nearly 2,000 workers.

He said that over the past 12 years, the level of bad debts written off was 3.12 percent.

When asked by the committee chair, Councilor Jane Henderson, if ELI was under pressure to expand, Mr. Baty said there was no pressure to lend as other programs are now available.

However, he said banks had “pulled out” from lending to high street companies and start-ups.

He said: “We’ve seen them especially this year [banks] are not interested in start-ups.

“We’ve heard from the rumor mill that banks have said to applicants, ‘I really like your business idea, but we’re not touching it.'”


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