Finance

Carbon Trust Interest Free Loans

Unsecured interest free loans

The Carbon Trust’s 0% loans are designed to reduce carbon emissions by enabling businesses to overcome the capital barrier of purchasing energy saving equipment. Loans are interest free, provided on an unsecured basis and you can borrow a sum flexible to your business needs of between £3,000 to £100,000. Repayments are offered on a 12 to 48 month basis. Examples of eligible energy saving equipment purchases include replacement lighting, warm air heaters, air compressors and boilers. Loan applications and the amount of loan to be offered, are assessed on the expected energy savings.

A loan that pays for itself

Loan repayments are calculated to be offset by your monthly energy savings. A Carbon Trust loan is actually designed to pay for itself, and save you money year after year.

A Government-backed scheme

The Carbon Trust is an independent, not for profit company set up by the Government to work with UK business and the public sector to cut carbon emissions through practical advice and support. The interest free loan scheme is one important way in which the Carbon Trust is supporting investment in energy efficiency to reduce carbon emissions.

What companies are eligible?

Small or medium-sized enterprises (SMEs) in England, Scotland, Wales and Northern Ireland can borrow from £3,000 to £400,000. SMEs are defined as companies with fewer than 250 full time employees and with less than €50 million in turnover (approximately £43m) or less than €43 million in assets (approximately £37m).

In addition, larger businesses that do not qualify for participation in the Carbon Reduction Commitment are eligible for a loan. As a guideline, this typically includes businesses with an annual electricity spend of less than £500,000. In Northern Ireland and Wales all enterprises could borrow from £3,000 to £100,000.

All enterprises need to have been trading for at least 12 months.

State Aid Restrictions

Companies operating in primary agricultural, fisheries and aquacultural, transport, coal or export-related activities are not currently eligible.

How much can you borrow and for how long?

The value of the loan offered will depend on the amount and type of energy saved. Different energy sources release different amounts of CO2 into the atmosphere as they are consumed (this
is called the CO2 intensity). The CO2 intensity affects the value of the loan that the Carbon Trust will offer.

The Carbon Trust will assess and verify the amount of CO2 that will be saved as a result of investing in the energy saving equipment. They will use the verified CO2 saving to quantify the size of loan we are able to offer, as well as the payback period for the loan. The minimum loan value is £3,000 and the maximum loan value is £100,000.

What energy saving equipment is eligible?

Loans are offered on the basis of on-site CO2 savings, and any equipment that saves enough energy will be considered. The types of projects that can be funded include the installation of replacement lighting, boilers, or larger-scale refurbishments of steam generating plant. Each application is individually assessed on the basis of its energy savings and the technology involved.

So what’s the catch?

There really isn’t one. The loans are simply designed to make it easier for you to invest in energy saving equipment. Bluebuild Energy can undertake the loan application on your behalf and you should receive an unconditional loan offer within 10 working days of submitting your application.

Taking out a loan will help you:

  • Overcome the capital cost barrier.
  • Make your business more profitable.
  • Benefit the environment by reducing your business’s CO2 emissions.

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