The Scottish Government’s SME Loan Scheme provides support to help you pay for carbon and energy saving upgrades in your business. If you have any questions about the scheme, we have compiled a list of answers to frequently asked questions below.
If you have a question that isn’t answered, please get in touch with our support team here or by calling 0808 808 2268.
Energy Saving Trust’s Services Delivery team manages all applications to the Scottish Government’s SME Loan Scheme.
Energy Saving Trust is authorised and regulated by the Financial Conduct Authority.
To discuss an existing application please contact the Services Delivery team by email at SMEloans@est.org.uk, portal message or by calling 0808 108 9414. They are open 9am – 5pm Monday to Friday and if your query requires a reply, they aim to respond to your query within 3 working days of receipt, but this may take longer during busy times or due to the nature and complexity of your query.
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), not-for-profit organisations and charities.
To be eligible, your organisation must:
These eligibility rules are strictly enforced and cannot be appealed.
Private sector landlords are not eligible for the SME Loan Scheme. If you are a private sector landlord, please contact Home Energy Scotland on 0808 808 2282 for information on schemes available for the private rented sector.
Commercial boats are also not eligible for SME Loan Scheme funding.
*If your business type has changed within the last year (for example, from a partnership to a limited company), you may still be eligible. Please contact your Business Energy Advisor who can advise you on the information you will need to submit with your application.
A wide range of energy-saving measures and renewables systems are eligible for funding.
If the measure you are considering is not listed below, please get in touch with Business Energy Scotland as other bespoke measures can be considered on a case-by-case basis by the Scottish Government. The Scottish Government approval needs to be sought prior to submitting the application and your Business Energy Scotland advisor can support you with this request.
Heating, ventilation and air conditioning:
Building fabric:
Other equipment:
Energy Saving Trust’s Services Delivery team manages all applications to the Scottish Government’s SME Loan Scheme via an online application portal.
To access this portal, you first need a qualifying report from Business Energy Scotland that recommends the measures that you would like to use the funding to install. Once you have received your report, you will be able to apply for the funding. Please let your Business Energy Advisor know that you would like to apply, and they will request that you are given access to the portal. You will also have the chance to book a meeting with them to discuss the application process.
Please note that a Business Energy Scotland report itself does not constitute a funding offer.
Business Energy Scotland’s reports are free and impartial. You can find out more here.
If you already have a suitable report from Business Energy Scotland please get in touch using our online form, or call us 0808 808 2268, and we will refer you to Energy Saving Trust’s Services Delivery team so they can arrange access to the funding portal.
For the measure(s) that you are applying for, please ensure the following conditions are met:
If you are a charity or not-for-profit organisation, your constitutional documents must allow you to borrow money. You may be asked to provide evidence of this. You also need to supply your three most recent year end accounts for credit assessment purposes.
If you are installing a heating system, you must have either already installed (or use this funding to install) loft insulation and/or cavity wall insulation if recommended in the qualifying report.
All renewable systems must be MCS (Microgeneration Certification Scheme) certified and must be installed by an MCS accredited installer. This does not apply to renewable heat technologies that are over 45kW or renewable electricity technologies that are over 50kW. For heat pumps that also provide cooling we recommend that installers and products are MCS certified but this is not mandatory.
In cases where an installer wishes to become MCS accredited, with your permission they may use the example of your installation to evidence their application for certification with MCS. Applicants allowing their installer to use the example of their installation to evidence MCS certification are eligible to apply if the following evidence is also provided:
Yes. Quotes must be provided in the right format – here is an example that shows everything required.
If you are intending to apply for funding to install eligible measures in a new build/self-build property (properties which are currently still under construction, not fully erected) or extension, the value of loan available will be equal to the difference between installing standard measures (those typically installed in this type of new building when build costs are minimised or required to meet current building regulations) and enhanced measures (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 and radiators, costing £15,000, but an alternative would be to install a heat pump and underfloor heating, costing £30,000. In this example, a total of £15,000 could be applied for. If this is applicable, a copy of the Building Warrant will be required to identify when it was granted and to ensure the building regulations at the time are applied.
Enhanced measures may also apply to cases in which a building warrant dictates that you need to install certain measures as part of your project for change of use cases and renovations. Please contact your Business Energy Advisor to discuss this in more detail.
Yes.
If the measure you wish to install has a payback period of more than 20 years, it will not be eligible for funding.
If you wish to apply for a package of linked measures which has a combined payback period of less than 20 years it will be eligible, even if one or more of the measures has a payback period of more than 20 years. For example, an organisation could apply for funding to install insulation with a 25-year payback period and a new heating system with a 6-year payback period, where the combined investment has a payback period of less than 20 years.
Linked measures should be dependent on each other, for example heating and insulation or lighting and lighting controls.
Measures that result in no financial savings or no carbon savings, or result in carbon increases, are ineligible for funding.
In addition, applications from businesses looking to sell heat or energy to third parties – other businesses or domestic properties – would not be eligible for funding. The SME Loan Scheme was not set up to cover this type of activity and as such the administrator has no mechanisms in place to confirm that the proposed energy supplier is suitably trained or experienced to ensure a secure and reasonably priced service. Any electricity-generating renewable system, which your qualifying report suggests will result in the site becoming a net exporter of electricity over the course of a year, is not eligible for funding.
The scheme is not accepting new applications for solar PV projects.
The scheme can’t be used to purchase second-hand equipment.
No. There is no obligation for your business to install all the energy-saving measures recommended in your report from Business Energy Scotland.
Although, if you are looking to access SME Loan Scheme funding to install a heating system, you must have either already installed (or use this funding to install) loft insulation and cavity wall insulation if recommended in the qualifying report.
All loans are interest-free.
The repayment term for all loans is 8 years. You can request a shortened repayment period if it better suits your business.
Applicants are actively encouraged to identify all finance options available to them including match funding/co-funding opportunities with the SME Loan Scheme. However, the funding cannot be used to pay off another loan or finance agreement.
If your business is planning to install a measure yourselves, you will be able to apply for material costs, but not labour. If you are working with a third-party installer, you can apply for both labour and material costs.
Yes, planning permission can be funded if the invoice is received after any potential loan offer date. Given the time that a planning application can take, it is likely that a loan extension will be required to support this.
Also, the funding for planning permission will only be paid once the measure is installed. If the planning permission is rejected and the measure is not installed, the funding for the application will not be paid.
If further work is required to allow you to install a measure, you can apply for funding to support this work. These enabling works will be assessed on a case-by-case basis. For example, if you are looking to add insulation to a new roof, you may receive funding for the insulation element, but not for the new roof.
A clear description of any enabling works being carried out should be added to the quote(s) you submit with your application.
Applicants can apply for both SME Loan Scheme funding and the Smart Export Guarantee. Any loans for measures which are benefiting from the SEG will not attract interest.
Applications are processed on a rolling basis all year round, subject to the overall availability of loan funds. The fund administrators 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.
Once the application is submitted to the fund administrators, providing they have all the information and supporting documents they require, and the loan is signed by an authorised signatory, they aim to make a decision within 10 working days.
If any additional information is required, the application process will take longer than 10 working days to process.
If you receive a funding offer through the SME Loan Scheme, this will be valid for six months, allowing you time to complete both the work and the claims process. If required, you can request an extension to the offer.
Our reports can be used to support applications to the SME Loan Scheme for up to four years from the date of issue. Although, after two years, your Business Energy Advisor will be asked to conduct some checks to ensure that no significant changes are likely to have impacted the report’s recommendations.
The person submitting the application and signing loan documents must be authorised by the business to enter into a loan agreement on behalf of the business.
If you are a sole trader or partnership, the sole trader or one of the partners in the partnership must submit the application (as a credit check will automatically be carried out on this individual), sign all future documents and complete identity verification checks.
Third party authorisation can be given to someone only to manage the application process.
If you are a limited company, the application should be submitted by a director or officer of the business who is listed on Companies House. All future documents and identity verification checks will need to be completed by the same person.
If the person submitting the application is not listed on Companies House, a letter of authority will need to be provided confirming the third party was given authorisation to manage the application process.
If you are a charity, not for profit or other organisation type, the application must be submitted by someone who is usually responsible for the organisation in legal matters, for example a Trustee, a Treasurer or a President.
Energy Saving Trust administers the scheme and is responsible for processing and assessing loan applications including undertaking the credit check. Applicants will deal with Energy Saving Trust for the loan assessment, offer and payment.
The SME Loan Scheme is financed by the Scottish Government with public funds and is unsecured. It is therefore essential that the fund administrator is lending money to organisations that are in a robust financial position and able to support ongoing loan repayments.
Energy Saving Trust is also authorised and regulated by the Financial Conduct Authority and as such, has a duty to lend responsibly. A credit check gives an indication of an organisation’s or individual’s financial position and their credit history, allowing Energy Saving Trust to gauge the level of risk that would be incurred as a lender. Energy Saving Trust will therefore also carry out affordability checks in certain situations to assess the impact of repayments.
Please note that for sole traders and partnerships, a hard credit check is carried out for each application made to the SME Loan Scheme.
There are several credit reference agencies that can be used to check your credit rating. If your organisation is set up as a sole trader or partnership, then the credit check will be done on an individual, so it is important you are aware of your personal credit rating.
If you have concerns regarding the credit assessment, the fund administrators can discuss this further and, if possible, undertake a credit review at an earlier point than they may normally do.
If an initial credit check is unsuccessful then the fund administrators will look to offer a route of appeal and allow for additional information to be submitted, such as company accounts.
The agreed loan amount will be released after the measure/s have been installed, invoiced for and, if required, a site inspection has been undertaken. A claim must be submitted via the Funding Portal.
Up to 25% of the offered funding amount can be requested as a loan drawdown/upfront payment. To access this upfront payment the supplier quote, or partial/deposit invoice must contain the request for an early payment. The drawdown payment is not processed automatically when the loan is offered but can be requested in the next stage of the process – the claim stage. The cashback grant funding cannot be claimed as a drawdown/upfront payment.
Where there is a domestic/commercial split in a property, funding could still be available, however the value will be proportionate to the percentage of energy use by the business.
No residential areas of your site will be eligible for SME Loan Scheme funding, though you may be able to access support from Home Energy Scotland.
When applying to the SME Loan Scheme, you will be required to provide evidence of the site split. Examples of documents that can be used to evidence this include a council tax letter or a screenshot of the relevant details on the Scottish Assessors website.
Private sector landlords are not eligible for the SME Loan Scheme. If you are a private sector landlord, please contact Home Energy Scotland on 0808 808 2282 for information on schemes available for the private rented sector.
If you are contacted about the loan by a third party and have concerns about their authenticity, please call Business Energy Scotland on 0808 808 2268 and our team will be able to advise you.
No, the scheme cannot fund any measure retrospectively. If you have started work, paid any deposits, or purchased and goods or services related to the measure you are looking to install, these will not be eligible for funding.
No. Movable measures must remain in the property of the business until the loan is fully repaid.
If your question is about an existing application, please contact Energy Saving Trust’s Services Delivery team.
Otherwise, please contact your Business Energy Advisor or Business Energy Scotland’s helpline on 0808 808 2268.
Cashback is awarded based on the total value of eligible measures applied for within your loan application.
The cashback grant funding can be awarded as per below:
Funding is allocated on a first come, first served basis and subject to availability.
An organisation can make multiple applications but up to the total cashback value of £30,000.
The maximum cashback value for an organisation is £20,000 for energy efficiency measures and £10,000 for renewable heating technologies. If your previous application was for £2,000 cashback you may apply again for the remaining £18,000 for further energy efficiency measures.
No, the grant element can only be accessed when you receive an interest free loan.
The cashback element will be paid to you (along with the loan) after the measure(s) have been installed, invoiced for and if applicable, evidence has been provided/a site inspection has been undertaken. A claim will need to be submitted via the Funding Portal.
Yes, providing you have not commenced your installation, paid for any works or materials before the loan offer, cashback will be paid to you (along with the loan) after the measure(s) have been installed, invoiced for and if applicable, evidence has been provided/a site inspection has been undertaken. A claim will need to be submitted via the Funding Portal.
Yes, assuming all other eligibility criteria are met, your organisation would be able to apply for a second loan up to a maximum funding amount of £130,000 across all loans/grants applications.
Cashback is not available where other Scottish Government grant funding is being accessed for the same energy saving measure. For example, if you received grant funding from an alternative scheme for new lighting, you won’t be able to access further grant funding for this through the SME Loan Scheme. But if you are also installing a heat pump and insulation, you could receive further cashback grant funding for these separate measures.
Yes, certain renewable technologies are not eligible for the cashback offer. These are wind turbines, micro-hydro systems, biomass room heaters (with radiators), combined heat and power with biomass, anaerobic digestion gas condensing boiler, gas boiler-burner management and gas boiler-burner replacement. The renewable technologies eligible for SME loan funding are listed in ‘What measures are eligible?’ above.
Acceptance of a cashback offer disqualifies customers from also applying for and receiving the Renewable Heat Incentive (RHI) on renewable heat measures as only one fund can be accessed per renewable heat installation. Customers are however able to forgo this cashback offer in favour of applying for the RHI funding – by indicating this on their application.
Cashback funding will not be available to organisations: