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SME loan fund

How to secure funding for your resource efficient projects

The Scottish Government can supply unsecured loans of up to £100,000 for resource-efficient projects in Scotland. If you are a small to medium enterprise (SME), based in Scotland, and have identified a waste reduction or energy-efficient measure that would not only save money in the long term, but also energy and carbon, then you may be eligible.

Projects could include:

  • Heating, ventilation, and air conditioning upgrades – for instance, assisted by an interest-free loan and our support, the Boat Hotel in Boat of Garten upgraded to a biomass boiler, saving £16,650 and 115 tonnes of carbon per year
  • Building fabric – including insulation, draught-proofing, double and secondary glazing
  • Renewables – from solar PV to wind turbines to wood-burning stoves
  • Water saving – be it installing a grey water system, harvesting the rain, or simply installing water-efficient taps

Where do I start?

Contact us and we’ll help you produce a qualifying report, or give us your Green Deal Advice Report – a list of Green Deal assessors is available from the Green Deal Oversight and Registration Board.

The report will provide details of:

  • Projected savings
  • Payback period
  • Comparison with current energy usage, costs and carbon footprint
  • Preparatory measures you will undertake – for instance, comprehensive insulation prior to installing a new heating system

We’ll help you with this with a free consultation – checking your eligibility and the eligibility of your proposed project – as well as supporting you through the application process.

Contact us for a free consultation and assistance with the loan process

From the audit report to the loan application through to implementation, we are here to assist you every step of the way.

Please call 0808 808 2268 or fill in the contact form and we’ll be in touch.

Important information

The Resource Efficient Scotland SME Loan is available to Scottish businesses that fall within the EU 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 and repayments will be made over four years unless you are applying for a renewable technology.  For loans concerning renewable technologies, and if you are intending to receive the Feed-in Tariff (FIT) or Renewable Heat Incentive (RHI), the interest rate is 5 per cent and repayments will be made over eight years. 

If you are not intending to claim the FIT or RHI then the loan is interest free.  The interest foregone on Resource Efficient SME loans is regarded as state aid under European rules and is granted as 'de minimis' aid under EC regulation 1407/2013, EC 1408/2013 or EC 717/2014. 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.

Loan assessment and support

Energy Saving Trust (EST) administer the scheme and are responsible for processing and assessing loan applications. Applicants will deal with EST for the loan assessment, offer and payment.

Commercial loans

There are a number of commercial lenders providing loans for energy efficiency measures. It is expected that businesses investigate these prior to application to this scheme.

Eligibility criteria for applicants in detail

The scheme is aimed at providing loan funding for Scottish businesses that fall within the EC definition of Small and Medium-sized Enterprise (SME), private sector landlords, not-for-profit organisations and charities.

To be eligible 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). (Calculated in accordance with European Commission Recommendation 2003/361/E).
  • Have no controlling interest more than 25 per cent by a non-SME.
  • Have a satisfactory credit score and be able to afford repayments.
  • Agree that repayments will be made within 4 years for energy efficiency only measures and within 8 years for other measures (including renewables).
  • Be eligible for funding within the context of EC State Aid rules.
  • Be applying for a loan of between £1,000 and £100,000*.
  • Not start work prior to a decision being made on your application.


If you are installing a heating system, you must have made all reasonable and practical effort to improve the building fabric.

For the measure(s) that you are applying for, please ensure the following conditions are met: 

  • A qualifying report must be obtained which details the measures you wish to apply for, along with the cost and carbon savings
  • The installed measure(s) is listed as eligible for support*
  • The loan will be for measures that result in carbon and financial saving. All carbon, cost and energy savings provided in qualifying reports must be calculated using the existing energy usage/ carbon footprint of the applying business and not from comparisons with suggested equivalents. If the current energy usage/ carbon foot print is not available e.g. site under construction or new expansion/development of the business, or is not used to make the calculations on savings, the application cannot be considered
  • The installed measure(s) will have an estimated payback period of 20 years or less (based on the financial savings in your qualifying report and the quotations you have provided).
  • Movable measures have to remain the property of the business until the loan is fully repaid.

For renewables measures, please ensure the additional conditions are met: 

  • The main energy efficiency measures recommended in the qualifying report are either already installed or will be installed before the renewables measure
  • An MCS (Microgeneration Certification Scheme) accredited installer will be used for renewable installations.

*Measures not included on the list may also be considered by the Scottish Government for inclusion in the scheme if they are accompanied by a Green Deal Assessment or if Resource Efficient Scotland provide a clear recommendation as to why the measure should be included. No additional measures will be included in the scheme without prior consent from the Scottish Government.

Applications are processed on a rolling basis all year round, subject to the overall availability of loan funds. 

As the loan administrators, Energy Saving Trust 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.

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