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Carbon Trust delivers credit boost for small businesses
Interest-free energy efficiency loans scheme expanded and loan size doubled to £200,000
Small businesses struggling for credit during the credit crunch received a boost today as the Carbon Trust announced it has doubled the maximum size of its interest-free Energy Efficiency loans from £100,000 to £200,000 - and increased the overall loans pot by 45 percent to £31 million this year.
The move is in response to the difficult market conditions and will enable small businesses to implement energy saving projects on a far more ambitious scale than previously possible. It is expected that the new scheme will generate 20 per cent more carbon and energy savings this year than would have been possible under the previous limit.
The loans, which are unsecured, interest-free and repayable over a period of up to four years, provide a cost effective way for small businesses to upgrade equipment with a more energy efficient version - thereby reducing energy bills and cutting their carbon footprint.
Loans are often offered on a partial basis, but the economic climate has made availability of alternative sources of financing more difficult. Large projects that can deliver the necessary carbon savings will now be eligible for loans that fund a greater proportion or total project cost.
It is expected that the larger loans will also lead to more applications from larger, more energy-intensive SMEs.
Mike Batt, Manager of Carbon Trust Wales said: “We know that SMEs want to play their part in tackling climate change, and reduce their energy costs at the same time. But in the current economic climate, the tighter credit conditions are making it harder for small businesses to find alternative sources of funding.
“We know that some companies found that the £100,000 limit made it hard for them to finance the more ambitious projects they wanted to invest in, such as large lighting installations, boilers projects, or multiple equipment purchases such as variable speed drives with compressors and heat recovery equipment.
“£200,000 loans pave the way for companies to take on such projects and significantly reduce both their carbon emissions and their energy bills, which in turn will enable them to reduce operational costs and become more competitive.”
The £31 million pot is nearly £10 million larger than the £21.5 million allocated in 2007/08. Loans allocated in Wales last year will reduce carbon emissions by nearly 4,000 tonnes of carbon dioxide each year and result in annual cost savings of over £450,000.
Since its inception, the Carbon Trust has helped business save around 17million tonnes of carbon dioxide, with associated financial savings of around £1 billion. To find out more, businesses can call the advice line on 0800 085 2005 or visit the Carbon Trust website at www.carbontrust.co.uk
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