Small business loans
Our fixed rate small business loans of £1,000 to £100,000 help businesses to reduce their carbon emissions, save money and increase their competitiveness.
Funded by the Scottish Government, the scheme aims to support businesses that are looking to reduce costs through improved energy, material resource and water efficiency.
Who can apply?
The scheme is aimed at Scottish businesses that fall within the EC definition of Small and Medium-sized Enterprise (SME), private sector landlords, not-for-profit organisations and charities. Private sector landlords will be eligible to apply for loans if they are registered as a private landlord with their local authority or if they are able to demonstrate that they are exempt from registration.
What is the interest rate?
- Loans are interest free (0%) unless you are applying for a renewable technology.
- For loans concerning renewable technologies and you are intending to receive the Feed in Tariff (FIT) or Renewable Heat Incentive (RHI) the interest rate is 5%
- If you are not intending to claim the FIT or RHI then the interest rate is 0%.
The interest foregone on Energy Saving Scotland Small Business Loans is regarded as state aid under European rules and is granted as de minimis aid under EC regulation 1998/2006, EC 1535/2007 or EC 875/2007. Businesses applying for an interest free loan should ensure that the interest foregone added to any other de minimis aid received does not exceed the de minimis threshold.
What are the benefits?
- No set up charges
- An immediate and ongoing reduction in costs
- Significant savings compared to other forms of finance
- Investment can be set against capital allowances
- Some technologies are eligible for Enhanced Capital Allowances; for more information visit etl.decc.gov.uk
What measures can our business apply for?
A wide range of measures can be the subject of a loan application (e.g. lighting, glazing, biomass boilers); however the measure you want to install must be recommended in a qualifying report.
What is a qualifying report?
A qualifying report can either be a Green Deal Advice Report (generated from a Green Deal assessment ) or a report from Resource Efficient Scotland.
All businesses applying to this scheme must have obtained a Green Deal assessment and subsequent advice report unless the measure to be installed is not eligible under Green Deal. In this case you must obtain a report from Resource Efficient Scotland (RES).
If you can gain Green Deal finance for the recommended measure(s) you want to install then you will not be eligible to apply to this scheme.
If you cannot gain Green Deal finance for the recommended measure(s) you want to install, you will need to provide evidence of this from three Green Deal Providers so that we can process your application under this scheme.
If you can only gain partial Green Deal finance for the recommended measure(s) you want to install, this scheme can provide finance for the required remaining funds. Pleaseprovide evidence of this with your application.
If your Green Deal advice report does not recommend the measure you want to install, you can obtain a RES report. However there is no guarantee that this measure will be recommended in the RES report.
You can find a list of Green Deal assessors, installers and providers at www.greendealorb.co.uk
You can contact Resource Efficient Scotland on 0808 808 2268.
There are a number of commercial lenders providing loans, for example for energy efficiency measures. It is expected that businesses investigate these prior to application to this scheme.
What are the criteria?
In order to qualify, your business must:
- Be based in Scotland.
- Have been trading for at least 12 months.
- Have fewer than 250 employees.
- Have a turnover not exceeding €50 million (approximately £42 million) and/or a balance sheet total not exceeding €43 million (approximately £36 million).1
- Have no controlling interest more than 25 per cent by a non-SME.
- Use a MCS (Microgeneration Certification Scheme) accredited installer for renewable installations.
- Have had a qualifying report undertaken: and be applying for measures recommended in that report.
- Be applying for a loan of between £1,000 and £100,000.
- Be applying for a loan of more than £25,000 if your business is a partnership or if you are a sole trader and you are applying for a loan on which you will pay interest.
- Use the loan for measures that result in a carbon and financial saving.
- Have a satisfactory credit score.
- Agree that repayments will be made within 4 years for energy efficiency only measures and within 8 years for other measures (including renewables).
- If you are installing a renewable measure, you must have either already installed (or use the loan to install) the main energy efficiency measures recommended in the qualifying report.
- Be eligible for funding within the context of EC State Aid rules.
1 Calculated in accordance with European Commission Recommendation 2003/361/EC
Applications are processed on a rolling basis all year round, subject to the overall availability of loan funds.
We reserve the right in consultation with the Scottish Government to suspend or reject preliminary assessments of applications on the basis that there are insufficient funds available in any financial year to provide loans to all applicants.
Download the application form below and read through the eligibility criteria and terms and conditions of the scheme.
Businesses applying to the scheme must wait for a written loan offer before commencing work on site. If you start work prior to the date of loan offer, your claim for payment will be rejected.
Please note, a qualifying report is required before you apply for a loan.