Scottish Government Grants / Finance

SME Loan – interest free from Resource Efficient Scotland

Grow a greener business with the SME Loan Scheme. Interest-free. Unsecured. From Scottish Government. 

The Scottish Government are doing their bit to assist SMEs in Scotland implement energy efficiency by providing interest free loans that can be used to cover both supply and installation of a wide variety of energy saving measures and renewable energy technologies.

In case you are wondering an SME (small to medium enterprise) is classed an organisation with less than 250 employees and turnover less than £43M.

I have secured these loans for a number of my clients, for example:

  • Huntly Golf Club obtained full funding for the replacement of an old and inefficient heating system with a fantastic wood pellet (biomass) boiler
  • Sainsbury’s Furniture and Carpets in Aberdeen replace their entire store lighting with smart new LED panels and retrofit lamps cutting electricity bills by over 80% and radically improving the look and feel of the store – no more sweltering customers on the top floor due to dramatically reduced wild heat gains from the old fluorescents.

The SME loan is offered through Resource Efficient Scotland – and is currently up to £100,000 interest free.  Ask me about it or visit the RES website linked below.

Scottish Government SME Loan Fund

The Scottish Government is committed to supporting small and medium sized Scottish businesses to reduce energy and resource costs. Reducing operating costs not only improves your margins but can help make you more competitive.

The SME Loan provides unsecured, interest free loans from £1,000 up to £100,000 for the installation of energy efficient measures such as lighting and heating upgrades, double glazing, insulation and much more. 

Your loan can be used to pay for:

  • Heating, ventilation and air conditioning upgrades – from single improvements to controls to complete system replacements
  • Lighting systems – fitting and controls
  • Building fabric – including insulation, draft-proofing, double and secondary glazing
  • Water saving – be it installing a grey water system, harvesting rain water or sampling installing water efficient taps
  • Waste reduction – installation of equipment to improve handling and reduce waste at source.

Don’t miss out on SME Lending

Since its launch in 2008, the SME Loan has provided Scottish businesses with over £24 million in loans for over 800 projects. The estimated financial savings to businesses is over £36 million.

“The support from Resource Efficient Scotland helped me to identify and fund the changes to my shop and I have seen my electricity bills drop by about 30%, saving me about £1,800 a year.” Aleem Farooqi, Owner, Goldenacre Mini Market

Who can apply?

The scheme is aimed at providing loan funding for Scottish businesses that fall within the European Commission 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 8 years.
  • 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

What supporting information is needed?

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. All businesses applying must have a
    report from Resource Efficient Scotland, or for private sector landlords, an Energy Performance Certificate (EPC) or specialist private sector landlord report from Home
    Energy Scotland.  As you may know I am a Commercial EPC Assessor
  • The installed measure(s) is listed as eligible for support – see the list of eligible measures in this FAQ document.
  • Two estimates are provided for loans over £25,000.
  • The installed measure(s) will have an estimated payback period of 20 years or less (based on financial savings in your qualifying report and quotations provided).
  • If you are installing a heating system, you must have made all reasonable and practical effort to improve the building fabric.
  • If you are intending to apply for funding to install eligible measures in a new build or extension, the value of loan available will be equal to the difference between installing standard measures (i.e. those required to meet current building regulations) and enhanced measures (i.e. those that will realise additional carbon and cost savings). For example, a standard build or extension may be heated by a gas-fired heating system costing £15,000, but an alternative would be to install a biomass boiler costing £30,000. In this example, a loan of £15,000 could be applied for.
  • 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 one of the qualifying reports listed above 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.

LED panels in an Aberdeen private school classroom funded by the SME loan    Biomass boiler installation financed through the SME loan  The SME loan paid for these LED lights in this Dundee warehouse