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Carbon Trust expands interest-free loans to help more SMEs survive the recession and cut carbon

The Carbon Trust is to improve access for small and medium businesses to over £100m in interest-free and unsecured loans, it was announced today. The move is intended to help more businesses survive the recession by cutting both their energy costs and their carbon footprints.

Thousands of small businesses have already slashed their annual energy bills, some by as much as 75%, by installing new energy-saving equipment paid for by Government-funded Carbon Trust loans.

Now the Carbon Trust has extended eligibility for the recently-expanded loan fund. The minimum loan amount has been lowered to just £3,000, putting the loans within reach of micro-businesses; the upper limit has been doubled from £200,000 to £400,000 to meet the needs of small and medium businesses with high energy spends, such as manufacturing companies.

The Carbon Trust expects to deliver over £100m in loan funding to UK SMEs over the next two years, including almost £84m in England allocated by the Government as part of Budget 2009.

In most cases, businesses taking a Carbon Trust loan to update their equipment find the savings they make on energy bills exceed the cost of the loan repayments. This means they benefit from brand new equipment, increased efficiency and reduced running costs, all at no expense to themselves. They also help to drive the UK’s move to a low carbon economy.

What can you buy for £3,000 or £400,000?

According to the Carbon Trust, a loan of £3,000 and upwards can fund a new energy efficient boiler, refrigeration, lighting or cooking equipment for businesses such as independent retailers, franchisees and caterers.

At the other end of the scale, loans of up to £400,000 could enable medium sized manufacturing companies to fit their factories with modern, less power-hungry, production equipment.

The Carbon Trust also offers advice to businesses, including a free on-site service to help them identify the energy-saving equipment with the greatest potential to reduce their running costs.

One business owner who has recently taken advantage of a Carbon Trust loan funding is Jeff Greenall of The Cavan Bakery in Hampton Hill, Middlesex. In 2008 Jeff received an interest-free loan of £31,000, enabling him to replace the bakery’s ageing oven and electric boilers with a new energy efficient gas powered steam oven.

As a result, The Cavan Bakery’s gas consumption has dropped by 75% and it is also saving 500 units of electricity each month – savings that have helped the business counter rising energy costs and ride out current economic difficulties.

“The Carbon Trust was very helpful, and applying for the loan was incredibly straight forward,’ said Jeff Greenall. “I kept thinking ‘what’s the catch?’.”

Source : The Carbon Trust