Small Producers Pilot Fund Criteria and Guidance
What is it?
The Small Producers Pilot Fund provides capital funding to support the small producer food, drink and textiles sector in Scotland.
The Fund is being delivered by South of Scotland Enterprise (SOSE) and Highlands and Islands Enterprise (HIE). If your business is based in the HIE’s catchment area, then please visit HIE’s website for more details.
If your business is located in the rest of Scotland, then please read further and follow the application guidelines specified below. You can check the map on the main fund page of the Small Producer Hub if you are unsure.
Funding will be targeted towards individual small producers as well as organisations which provide services or benefits to a group of individual small producers – such as food hubs, producer groups, communal infrastructure, abattoirs etc.
We are looking to support projects that achieve one or more of the following outcomes:
- Increased levels of innovation and productivity
- Sustainable local food and drink production
- Improved collaboration
- Increased energy efficiency
- Strengthened and/or shortened supply chains
- Sustained jobs in rural communities
- Strengthened local economy.
About the fund
The total budget available in South and Central region is £325,000. The funding is offered as a non-repayable capital grant of:
£1,000 - £10,000 to individual small producers, or
+£10,000 - £50,000 to collaborative bids
Grants may cover up to 100% of the total cost of the project. The final grant will be subject to specific terms and conditions set out in an individual grant award letter.
All projects must be completed and claimed for by 10th March 2026. If the full grant awarded to you has not been claimed by this date, the balance will be withdrawn.
If planning permission is required to implement the works detailed in your application, this must be in place prior to submission of your Expression of Interest (EOI) in order to fully claim the project by 10th March 2026. Evidence will be required along with planning permissions and any other building consent as part of your application, if relevant.
What can the funding be used for?
The funding can be used towards capital investment, including but not limited to:
- New capital equipment designed to improve productivity and efficiency that is available to purchase immediately
- Shared services/facilities (i.e. refrigeration, butchery, waste management, processing of yarn)
- Fixtures and fittings
- Installation costs and related small building works
- Expansion or upgrading business premises
- Computer equipment if required as part of a wider process innovation solution
- In exceptional circumstances, the purchase of vehicles e.g. delivery vans may be considered at SOSE’s discretion.
Where retail of small producer food, drink and textile products forms the core of the organisation, applicants must demonstrate how their project will achieve at least one of the following:
- Deliver significant impact within a remote or rural area
- Offer a distinctive proposition that benefits small producers.
What the funding cannot be used for
Funding cannot be used for the following:
- Projects that have already started at the time of submitting an expression of interest. Any costs that have been invoiced to the applicant or paid by the applicant prior to submitting an expression of interest will not be eligible for funding and any expenditure incurred before an approval is entirely at the applicant’s own risk.
- Revenue costs e.g. wages, training, marketing, consultancy, feasibility studies etc.
- The purchase of heavy vehicles e.g. tractors
- Replacement or refurbishment of existing equipment
- Software or app development costs including websites
Who's eligible?
Individual Bids
- Individual small producers (farmers or crofters) with holdings of 30 hectares or less:
- Registered sole trader, partnership, limited company, a constituted & registered social enterprise, including start-ups
- Have an annual turnover of less than £2 million
- Have a Business Reference Number (BRN) or, for landless businesses, a flock number
- Have a primary business producing raw materials, food and drink or textiles for sale and operating in the local and domestic markets (export market is non eligible)
- Have up to 10 FTEs, including seasonal and self-employed workers but excluding apprentices and volunteers
- Be compliant with current Fair Work conditionality rules
- Hold a business bank account, except start-ups.
- If relevant to the project, applicants must own premises or have a lease in place with at least five years remaining and have written permission from your landlord to make changes to the premises.
Collaborative Bids
Collaborative bids will be accepted from partnerships involving two or more producers, organisations, or partners working together to deliver a shared outcome (e.g. joint infrastructure, shared equipment, supply chain development). This includes but is not limited to:
- Food Hubs – entities that aggregate, distribute, or market products from multiple small producers
- Routes to Market – organisations that create or facilitate routes to market for individual small producers
- Representatives Bodies – organisations that promote/showcase small producers such as Regional Food Groups or Farmers Markets
- Shared Services & Facilities Providers – organisations offering collective resources such as processing, storage, or distribution facilities
- Abattoirs (please note applications from abattoirs will be discussed with the Scottish Government to ensure alignment with alternative public sector support).
- Collaborative bids may be led by a single applicant acting on behalf of a group, or by a formal partnership.
- All partners must meet the core SPPF eligibility criteria (e.g. Fair Work commitment, regional relevance, have an annual turnover of less than £2 million)
- The collaborative nature must be clearly evidenced (e.g. signed partnership agreement, joint business case, letters of support).
Who is not eligible?
- Businesses and organisations that are not based within the Fund’s catchment area
- Large enterprises (exceeding the SME definition*) including individual businesses, social enterprise or where a group of related businesses together is part of a large enterprise
- Organisations which are primarily core funded by the public sector (core funding does not include project funding and service level agreements within the public sector)
- Religious and political organisations.
Application process
The application process includes two stages, starting with an online Expression of Interest (EOI). If successful, applicants will be invited to submit a full application.
You will hear the outcome of your EOI within 10 working days of submission.
How to apply
Complete and submit the EOI form at the bottom of this page.
On the EOI form, it is important that you provide a sufficient level of information and detail to enable us to assess your applications efficiently
If you progress to the second stage of application, you will need to supply supporting documentation. This includes copies of historic accounts and evidence of quotes for goods and services.
The small print - this is important
- All SOSE grant assistance is discretionary.
- Grant awards are subject to due diligence and budget availability.
- Making an application to the fund does not guarantee that your application will be successful.
- There is no appeals process. We are unable to consider a complaint purely relating to dissatisfaction as to the outcome of a funding decision. However, if you have identified a specific process failure relating to your application, then you may wish to make a formal complaint. See our formal complaints process for more information.
- A proportion of successful applications will be subject to audit after project end, and this may include mystery shopper visits to confirm the installation of the assets in situ.
Definitions
*SME
The main factors determining whether an enterprise is an 'SME' are that in your last published annual accounts you had:
- Less than 250 employees (full time equivalents)
- Either a turnover of no more than €50m (£44m) or balance sheet total no more than €43m (£38m).
Small producer
The definition of a small producer is:
- Have a holding no larger than 30 hectares (excluding common grazing), no minimum size.
- Are active/operating with an annual turnover of less than £2 million.
- Have a Business Reference Number (BRN) or, for landless producers, a flock number.
- Operating in the local and domestic food and drink market (the export market is outwith scope).
- Have 10 or fewer Full Time Employees (FTEs), including seasonal and self-employed workers but excluding apprentices and volunteers.
Fair Work conditions for financial support
Any organisation applying for grant funding from South of Scotland Enterprise must comply with our fair work conditions for financial support.
This includes:
- paying all employees, aged 16 years and above (including apprentices), the Real Living Wage as a minimum;
If you cannot meet this criterion, please contact us before you apply for funding, email clienthub@sose.scot
- having a flexible working policy; and
- the ability to demonstrate how you support workforce development and foster employee engagement.
If you would like to speak to someone about our fair work requirements for funding or need more information please contact us.