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Aberdeen energy industry firm Phuel Oil Tools Limited is one of the first companies to access the Scottish Loan Fund (SLF), Finance Secretary John Swinney announced today.

On a visit to the company, which specialises in developing and manufacturing equipment for the oil and gas sector, Mr Swinney confirmed it has secured a £1 million loan from the SLF to support its plans for growth and internationalisation.

Improving access to finance to support growth and investment is a key part of the Government Economic Strategy. The SLF, which is managed by Maven Capital Partners, offers finance of between £250,000 and £5 million to businesses which demonstrate growth or the intention to grow and exporting businesses.

The SLF has more than £94 million of resources - £39 million of private sector and £55 million of public sector investment - and is a product of the Scottish Investment Bank which is a division of Scottish Enterprise.

Established in 2005, Phuel has already introduced its pressure control equipment (PCE) to the Norwegian market and the company is now actively targeting increased sales in US and UK markets. This funding will be used to increase exports and develop new products, and to take forward these growth plans the company will almost double its existing workforce to 21 employees by the end of 2011.

Cabinet Secretary for Finance, Employment and Sustainable Growth John Swinney said:

"The Scottish Government and our enterprise agencies are working hard to retain Scotland's position as the most competitive place in the UK to do business.

"The Scottish Loan Fund is just one of the practical actions that this Government and Scottish Enterprise are taking forward to accelerate economic growth through improving access to finance.

"As we work to strengthen Scotland's economic recovery, it is important that access to finance does not hamper the ambitions of businesses that have strong potential for growth, particularly in international markets.

"The Scottish Loan Fund is offering the financial support that Phuel Oil requires to realise its growth plans, access international markets and expand its operations. Through its expansion plans Phuel Oil will not only increase its Aberdeen workforce but also its contribution to Scotland's prosperity and economic success."

Managing Director of Phuel Oil Colin McCracken said:

"We have found the Scottish Loan Fund to be ideal for expanding companies, such as ours, which are finding it difficult to fund growth in the current economic climate.

"We are now able to expand our sales globally whilst maintaining trading headroom, but importantly for Phuel the structure of the loan avoids any dilution of ownership. As a result of this capital injection we fully expect to double our turnover in the next two years and expand our workforce both in Aberdeen and abroad."

Scottish Enterprise managing director of operations, Jim McFarlane said:

"This announcement signals the start of a fresh stream of finance which is now reaching Scotland's small and medium sized enterprises with growth and exporting potential. Lending remains a major issue for firms, it is therefore extremely encouraging that the first deals are now being concluded and a healthy pipeline of applications and offers of funding indicate a steady flow of deals for the coming months."

Maven partner Andrew Craig said:

"Phuel Oil is an excellent example of how a successful Scottish SME can benefit from the funding provided by the SLF. Having access to finance has put the business in a strong position to use its innovative technology to gain a competitive advantage and increase market share."

The Scottish Loan Fund has more than £94 million of commitments, made up of £39 million of private investment and £55 million of public sector funding which includes a contribution of £22 million from the European Regional Development Fund. Managed by independent fund manager Maven Capital Partners, the SLF is a product introduced by the Scottish Investment Bank (SIB), which is a division of Scottish Enterprise (SE).

The Scottish Investment Bank supports the development of Scotland's private sector SME funding market to ensure both early stage and established businesses with growth and export potential have adequate access to growth capital.

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