Green Financing: A guide to Green Loans and Eco Grants
The UK government currently has funding of over £5 billion available to help businesses in the UK become greener as part of their commitment to hit net zero emission by 2050. This means that now is a good time for businesses throughout the UK to begin thinking about how they can invest in cleaner technology and promote environmentally friendly practices for their business.
Throughout many areas of the UK, there are specific grants available to businesses through local and national government and energy efficiency organisations that are dedicated to helping businesses reduce the UK’s overall carbon footprint
In this week’s blog, we are looking at what Green Loans and Eco Grants actually are, what types of grants are available and where they can be found
What are Green Loans and Eco Grants?
Green Loans and Eco Grants provide finance to companies that are focusing on environmentally friendly projects or objectives. Usually, these types of loans offer more attractive terms than those provided under ‘normal’ commercial terms. Currently, Green Loans and Eco Grants are most often available to start-ups and small businesses, although there are a few available to larger companies.
Eco Grants: Grants do not need to be repaid, but they do tend to come with quite strict restrictions in regard to how the funds must be used and a time frame for when the funds must be used by.
Green Loans: Loans have to be repaid, and there are far fewer restrictions attached to them than with a grant.
How Can I find out what Green Loans and Eco Grants are available?
Currently, the most popular Green Loans and Eco Grants are being provided by Local Governments to businesses that are operating in their geographical catchment area. Therefore, it is best to contact your Local Authority to see what is available.
The national government also has a number of schemes currently available. The Department for Energy and Climate Change (DECC) and the Department of Environmental, Food and Rural Affairs (DEFRA) are both involved in providing grants.
Then there are the non-profit organisations such as The Carbon Trust who are also providing support to small businesses and start-ups.
What types of Funding are Available?
Bio-Energy Capital Grants Scheme – Run by the Department of Energy and Climate Change (DECC), this grant is used to support biomass-fuelled heat, and combined heat power projects in English industrial and commercial sectors. The grant is offered as part of the UK Environmental Transformation Fund which encourages understanding of lower-carbon technologies amongst individuals and businesses.
Enhanced Capital Alliance (ECA) – This is a government-sponsored scheme that is in place to help manage climate change by providing businesses with tax relief for their investments in equipment that meet the specified energy-saving criteria. In the first year, it allows businesses to write off the full cost of their energy-saving investments against their taxable profits. This scheme covers a wide range of products including lighting, heating pumps and boiler equipment.
As previously mentioned most local authorities have a variety of grants and funding options available for business including Low Carbon Workspaces and de-carbonisation projects.
You can find out more about the Government’s commitment to Net Zero Emission and its effects on small businesses in our blog Net Zero and Small Business
For more information about Green Loans and Eco-Grants speak to one of our business finance consultants today and see how you may be able to obtain finance for your business and help the environment at the same time.
Tel: 020 3857 3030