Resource Efficiency Projects - A Guide to Funding

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Sources of finance

How to fund your

resource efficiency

projects

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Contents

1 Introduction 3

2 Finance options 4

2.1 Identifying the right sources of funding for your organisation 4

2.2 Types of finance 5

3 Potential funding options 9

3.1 Project type (1): To improve the resource efficiency of your premises 10 3.2 Project Type (2): To improve your process efficiency 11 3.3 Project Type (3): To develop your in-house resource efficiency capabilities 12 3.4 Project Type (4): To reduce the carbon footprint of your organisation 13 3.5 Project Type (5): To undertake a renewable energy project 14

4 Further information on sources of funding 15

4.1 Government-supported loan schemes 15

4.2 Other Government-supported schemes 17

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1 Introduction

There are many no and low-cost projects you can undertake to improve your organisation’s use of resources and save money on energy, water and raw materials. However, for some projects, especially those where new technology and equipment are needed, a significant financial investment may be required.

While some organisations have internal funds that can be used to finance these projects, external sources of funding, such as loans and grants, present an alternative option.

A vast array of different sources of funding is available to organisations in Scotland and this guide is intended to help you understand the different finance and funding options that may be available to help your organisation to operate more sustainably.

Of course, we recommend that you ultimately obtain advice from your accountant or other appropriately qualified independent financial professional before making any financial commitments.

A supporting guide ‘Accessing finance – Developing a business case for your resource efficiency projects’ will help you if you are you planning a resource efficiency project in your organisation and need to access finance. It shows you how to prepare a robust business case to support your proposed investment decision and how to present a strong case for

investment to your senior management or external lenders. It is available to download from

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2 Finance options

There are many finance options that might be suitable to help you fund new resource efficiency projects. The suitability of each will vary depending on a number of issues that are specific to your organisation, the type of project being undertaken and the level of risk associated with different finance options.

2.1 Identifying the right sources of funding for your organisation

2.1.1 Organisational factors

Your type of organisation will be a determining factor in the options available to you. Resource efficiency projects may be relevant to:

 small and medium sized enterprises (SMEs) (the EU definition of an SME is ‘an

organisation with fewer than 250 employees and annual turnover of no more than

EUR50 million’)1_;

 social enterprises;

 charities; and

 large organisations or organisations that are part of a larger group.

This guide looks at financial options for the first three types of organisation listed above. Other factors that may need to be considered include your organisation’s location, cash-flow situation and ability to borrow. All of these will impact on the potential sources of funding available to you at any given time.

In addition, factors such as the potential for job creation or the safeguarding of jobs may open additional avenues of financial support.

2.1.2 Project factors

There are five broad types of project that your organisation may wish to undertake: 1. Improve the resource efficiency of the premises (including energy and water use). 2. Improve process efficiency (making internal/manufacturing processes more resource

efficient – including water, energy and raw materials use, and waste management). 3. Develop in-house capabilities in resource efficiency (bringing knowledge and skills into

the organisation for long-term improvements).

4. Reduce the carbon footprint of the business (including support to introduce lower carbon transport and travel alternatives).

5. Undertake renewable energy projects (including community schemes and micro-generation).

There will be different funding options available depending on the type of project and the activities to be undertaken. In some circumstances, additional criteria will also come into play. For example, some funding mechanisms require the purchase of capital equipment for an application to be valid or need to understand how the project will support growth and development plans. Other sources may be related to specific industry sectors or resource

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management activities and some may have a wider remit covering many different types of project activity.

2.2 Types of finance

A key consideration relates to the type of finance that it is appropriate and/or available at a particular time and the level of risk you are willing to take on. In addition, some grant schemes will have a deadline for applications and the types of projects being supported may change for each round of funding. The options potentially available to you fall into two broad categories and are described below – Government-supported schemes and commercial sources. There are advantages and disadvantages with each of these funding mechanisms and these must be considered carefully for each situation.

2.2.1 Government-supported finance

Grants

A grant is an amount of money given to an individual or an organisation for a specific project or purpose and is often from the Government, a local authority, a charity or the European Union. A grant does not need to be paid back, but there is often a lot of

competition for the available funds. Organisations are usually expected to match the funds that are awarded.

Loans

A loan is credit, usually in the form of cash that you borrow and repay over an agreed length of time. As well as repaying the amount borrowed, interest is normally paid on the loan at a specified rate. Most loans are provided on commercial terms, but Government-supported loans are often provided with low or favourable rates of interest.

Tax incentives

Tax incentives can take different forms, but are generally described as a deduction,

exclusion or exemption from a tax liability. They are offered as an enticement to engage in a specified activity (such as investment in capital goods) for a certain period.

The main type of incentive discussed in the context of this guide relates to capital

allowances that allow the cost of certain assets to be written off against taxable profit. An example of this is the Enhanced Capital Allowance (ECA) Scheme, which:

 enables businesses to claim 100% first year capital allowance on investments in

certain energy and water saving equipment; and

 allows investments to be made in resource efficiency improvements at much lower

cost to the business than would otherwise be the case.

For energy saving equipment, please visit the Energy Technology List website

(www.etl.decc.gov.uk/etl/site.html) and for water saving equipment, please visit the Water

Technology List website (http://wtl.defra.gov.uk).

It is recommended that you get advice about purchasing these products at an early stage of your procurement process.

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Guarantees

Different types of guarantees can be accessed to support financial outlays, reducing the risk for organisations and lenders.

For example, WRAP’s eQuip scheme (see Section 4.2.7) guarantees the future value of equipment being leased, which will reduce the regular payments that need to be made. Other investment funds may provide loan guarantees to facilitate access to finance.

Fiscal incentives

Fiscal incentives include the Government’s Feed-in Tariff (FIT) and Renewable Heat Incentive (RHI).

Under the FIT, organisations generating their own ‘green’ electricity receive financial benefit in the form of payment for the electricity produced and a reduction in standard electricity bills from using the energy they produce. Please visit

www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Feed-In-Tariffs-scheme-FITs for further information on FITs.

The RHI is the world’s first long-term financial support programme for renewable heat. The RHI pays participants of the scheme (such as householders, communities and businesses) that generate and use renewable energy to heat their buildings.

Please visit

www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Renewable-Heat-Incentive-RHI3 for further information on the RHI. 2.2.2 Commercial sources of finance

There is a wide range of commercial sources of finance for SMEs and other organisations. The guiding principle behind all commercial finance is the balance between risk and reward for the lender – the higher the risk, the higher the interest rate is likely to be.

To go down this route you would need to demonstrate that your organisation is creditworthy or investment ready. Your proposal must be commercially viable to any provider of finance and have the ability to ‘feed the funding’, making payments, repayments or providing an investment return.

However, access to commercial sources of finance has become much more challenging since the onset of the financial crisis in 2008.

To help address this problem, the Government has introduced the Enterprise Finance Guarantee (EFG) scheme. The EFG is a Government guarantee scheme provided by the Department for Business Innovation & Skills intended to facilitate additional bank lending to viable SMEs with insufficient or no security with which to secure a normal commercial loan. The Government guarantees every single loan in each lender’s portfolio at 75% until an individual lender’s default reaches 13% of the value of its annual EFG portfolio. The borrowing requirement is £1,000 – £1 million with the term of the loan ranging from 3 months to 10 years.

The EFG is open to viable businesses that operate in the UK and have a turnover of up to £41 million. The majority of sectors are eligible for the scheme.

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Borrowing money from an outside source with the promise of paying the amount borrowed at an agreed level of interest is known as debt finance. Commercial debt finance can take a number of different forms but are typically secured or unsecured.

Security may be required against the value of an asset that is owned, it must be unencumbered and be available to pledge as collateral. This may ultimately be sold to recover debt and/or outstanding interest. If it is unsecured, no assets require to be provided as security. The main types of debt finance are explained below.

Asset finance

Asset finance takes two main forms – leasing and debtor finance.

Hire purchase/leasing

Hire purchase/leasing can be used to finance your assets and arranged quickly. Assets are owned by the asset finance provider. One of the advantages of hire purchase/leasing is that the agreement is taken out on the asset and, in most cases, removes the need for any additional security. This makes hire purchase/leasing more accessible for smaller businesses.

Hire purchase/leasing can remove the need for a large down payment, thereby assisting with cash flow management. With hire purchase, you take ultimate ownership of the asset after making regular payments throughout the agreement.

Finance lease allows you to rent an asset rather than buy it. While you never own the asset, you will usually receive a proportion of the proceeds when it is sold at the end of the agreed term.

Debtor finance

You may be able to access finance from your trade debtors through either factoring or invoice discounting. In both cases, the ‘quality’ of the debtor is key – debts have to be clean and collectable. Factoring is a financial transaction in which a business sells its invoices at a discount to a third party (called a factor) to collect on their behalf. It is not a loan. Invoice discounting enables a business to obtain money against its sales invoices before payment has been received.

It may be difficult for SMEs to get debtor finance. The cost of finance depends on the quality of debtors and the type of facility. It tends to be more expensive than bank loans. The quality of your organisation’s management systems will be important in securing this type of finance.

Commercial mortgage finance

Banks and building societies can supply commercial mortgages if you are looking to purchase property. There are encouraging signs that the market is easing, with loan-to-value rates typically in the range of 60-70%. The terms for these products can be fixed or have floating interest rates similar to domestic mortgages, with flexibility in relation to repayment periods and capital repayment holidays.

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Bank loans and overdrafts

Bank loans can be flexible in relation to the term, capital repayment holidays and whether they are based on a fixed or floating interest rate. Lenders are more cautious following the market crash and make efforts to protect themselves from potential losses. In order to protect their interests, many lenders insist on including debt-related loan covenants. Such covenants often include interest cover and loan-to-value ratios. For the latter, lenders frequently require a debt service ratio of 1:1.2 or greater. This means that, for every £1 of debt a borrower must cover in a given period, it has £1.20 in net operating income (NOI)

available to service it. Lenders may also require security (such as a debenture2_plus

personal support).

Banks now prefer debtor finance and for working capital they may require this to be repayable on demand. Banks will charge fees on renewal of a facility as well as interest on borrowings. Interest is commonly charged well above the base rate.

Bank loans may have a number of hidden charges and issues. There are costs and time considerations involved when setting up a loan. There may also be late (and early) payment penalties, redemption penalties and the impact of breaching any terms associated with the loan. If the loan is unsecured, a higher interest rate will be charged and amounts provided will be smaller.

For larger loans, a bank will typically seek to secure the loan against an asset, such as business property, or it will require personal guarantees (on personal homes for instance) from company directors. It may be possible to limit the scope and duration of any personal guarantees (for example, when cash flow reaches a certain level or after a set period of time). Freehold and long-lease property is the most valuable asset, against which a bank will usually lend between 50% and 80% of a property’s value.

While all banks would consider requests for loans for resource efficiency projects, there are some that have dedicated funds available for such projects, including; the Royal Bank of Scotland (RBS), Lloyds and Rabobank. These funds cover resource saving measures (such as insulation, lighting and high-efficiency boilers). The UK Green Investment Bank and Societe Generale Equipment Finance have jointly committed £50 million to finance non-residential energy efficiency projects. Other banks, such as Triodos, focus on funding environmental and ethical projects, including those to improve resource efficiency. 2.2.3 Commercial sources – debt finance

As commercial lending varies due to market conditions, it is not possible or appropriate to list individual sources of finance. However, Better Business Finance

(www.betterbusinessfinance.co.uk) is a website that provides impartial information and support to businesses and entrepreneurs looking to develop and grow; whether the business is seeking finance, or starting out or exporting abroad.

Better Business Finance was set up by Barclays, HSBC, RBS, Lloyds and Santander in 2011 and is managed by the British Bankers’ Association (BBA) in collaboration with its business and finance partners. It was created to bring to life the recommendations of the Business

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Finance Taskforce, which was set up by the major banks to work together to help support the UK’s SMEs.

3 Potential funding options

This section identifies a number of different sources of funding that could be considered by three types of organisation (SMEs, social enterprises and charities) to finance the five different projects indicated previously. The list of options is not exhaustive and is based on

information available in October 20143_.

Please note that for each of the options presented, you will need to look carefully at the eligibility criteria and the suitability of each for your needs. A brief description of each funding source can be found in section 4.

3_{The options identified do not include the following funding sources R&D funding, innovation funding,}

sector-specific funding or local authority funding of a more general nature. These were considered to be outside the scope of this guide.

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3.1 Project type (1): To improve the resource efficiency of your

premises

Table 1 highlights a number of potential funding options to consider for projects that seek to improve the resource efficiency of your premises. This could include installing energy

efficient lighting or heating systems.

Table 1: Funding options – Improve the resource efficiency of your premise

Type of organisation Additional project funding Type of funding

1. Improve the efficiency of the premises

S M E S oci a l e n te rp ri se Ch a rit y Ca p it a l e q u ip m e n t/w or k in g ca p it a l/ d e v e lo p m e n t ca p it a l S u p p or t b u sin e ss g ro w th A cc e ss e x te rn a l k n ow le d g e /s k il ls G ra n t L oa n T a x i n ce n tiv e G u a ra n te e s O th e r in v e st m e n t F u n d in g s ou rce

Regional Selective Assistance (RSA) √  

Sustainable Tourism – Business Grant Scheme √ √   

Sustainable Business Grant (Aberdeenshire) √ 

Sustainable Business Growth Fund (North Lan) √    

Flexible Business Development Grant (Orkney) √   

Business Venture Fund (Renfrewshire) √   

Shetland Business Energy Efficiency Scheme √ 

Climate Challenge Fund √ √ 

Resource Efficient Scotland SME Loans √ √ 

Carbon Trust – Energy Efficiency Finance √ √ √ 

East of Scotland Investment Fund √   

West of Scotland Loan Fund √   

Highland Opportunity Fund √   

Supporting Aberdeenshire Business Loans √  

Commercial/bank loan √ √ √ 

Enhanced Capital Allowances √ √ √  

Green Investment Bank √  

Green Deal √ √ √ 

FIT, Renewable Obligation Certificates and RHI √ √ √ 

Bank overdraft √ √ √ 

Commercial leasing √ √ √ 

Equity investment √ √ √ 

Please note, several of the grants mentioned above are applicable to specific regions only.

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3.2 Project Type (2): To improve your process efficiency

Table 2 highlights potential options for funding improvements to the efficiency of your processes. This may be related to making the operation or manufacturing process more resource efficient or it could address a more efficient use of waste products or output materials.

Table 2: Funding options – Improve process efficiency

2. Improve process efficiency

S M E S oci a l e n te rp ri se Ch a rit y Ca p it a l e q u ip m e n t/w or k in g ca p it a l/ d e v e lo p m e n t ca p it a l S u p p or t b u sin e ss g ro w th A cc e ss e x te rn a l k n ow le d g e /s k il ls G ra n t L oa n T a x i n ce n tiv e G u a ra n te e s O th e r i n v e st m e n t F u n d in g s ou rce

Regional Selective Assistance (RSA) √ _ _

Sustainable Tourism – Business Grant Scheme √ √   

Sustainable Business Grant (Aberdeenshire) √ 

Sustainable Business Growth Fund (North Lan) √    

Flexible Business Development Grant (Orkney) √   

Business Venture Fund (Renfrewshire) √   

Capital Equipment (South Lanarkshire) √ _ _ _

Business Capital Grant (West Dunbartonshire) √ _ _ _

Enterprise Ready Fund √ _ _

Climate Challenge Fund √ √ 

Scottish Loan fund (SLF) √   

Carbon Trust – Energy Efficiency Finance √ √ √  

Scottish Recycling Fund √ √  

East of Scotland Investment Fund √ _ _ _

West of Scotland Loan Fund √ _ _ _

Highland Opportunity Fund √   

Supporting Aberdeenshire Business Loans √  

Enhanced Capital Allowances √ √ √  

eQuip (leasing scheme) √  

RETrieve Scotland Support Programme √ 

Green Investment Bank √ _ _

Again, a number of grants are available in specific local authority areas that could be used to support these types of project. However, most of them require an element of capital

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3.3 Project Type (3): To develop your in-house resource

efficiency capabilities

Table 3 identifies potential sources of funding for staff training and development, which will bring knowledge and skills related to resource efficiency into your organisation. A number of these can also pay for the costs of external expertise to support projects to achieve success.

Table 3: Funding options – Develop in-house capabilities in resource efficiency

3. Develop in-house capabilities in

resource efficiency _SM E S oci a l e n te rp ri se Ch a rit y Ca p it a l e q u ip m e n t/w or k in g ca p it a l/ d e v e lo p m e n t ca p it a l S u p p or t b u sin e ss g ro w th A cc e ss e x te rn a l k n ow le d g e /s k il ls G ra n t L oa n T a x i n ce n tiv e G u a ra n te e s O th e r i n v e st m e n t F u n d in g s ou rce

Low Carbon Skills Fund √ √ √ _

Technology Strategy Board Innovation Vouchers √   

ScotGrad (Skills Development Scotland) √ √   

Sustainable Business Growth Fund (North Lan) √     Flexible Business Development Grant (Orkney) √   

Enterprise Ready Fund √  

Commercial/bank loan √ √ √ _

Bank overdraft √ √ √ _

In Table 3, there is a predominance of grant funding. There is also a general requirement within this theme for the funding to be used to support businesses to grow and develop, whether organically, through diversification or other means.

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3.4 Project Type (4): To reduce the carbon footprint of your

organisation

Table 4 presents potential funding options specifically focused on helping you to reduce the carbon footprint of your operation. Many of the projects that would fit into the areas

discussed previously may also have a positive impact on the carbon footprint of your business, but the funding sources listed here are aimed at measures to proactively achieve this.

Table 4: Funding options – Reduce the carbon footprint of the business

4. Reduce the carbon footprint of the business

Climate Challenge Fund √ 

Low Carbon Transport Loan √ 

Bank overdraft √ √ √ _

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3.5 Project Type (5): To undertake a renewable energy project

Table 5 identifies sources that could be investigated to help you develop and undertake a project involving the generation of renewable energy.

Loans are a key way to access finance for projects of this type. However, other types of investment are available, such as equity investment, which could bring key expertise into the business for larger scale projects. Again, the eligibility criteria and conditions placed on the funding source need to be considered carefully. Finance options will also depend on the type of renewable energy project, its size and the benefits that will be gained.

Table 5: Funding options – Undertake renewable energy project

5. Undertake renewable energy project

Regional Selective Assistance (RSA) √  

Scottish Loan Fund (SLF) √   

Community and Renewable Energy Scheme (CARES) √ √ √ 

District Heating Loan Scheme √ √ √ 

Carbon Trust – Energy Efficiency Finance √ √ √  

Renewable Energy Investment Fund √ √   

FIT, Renewable Obligation Certificates and RHI √ √ √ 

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4 Further information on sources of funding

This section describes the main sources of finance available to organisations wishing to fund resource efficiency improvements, with a particular emphasis on Government-supported or endorsed schemes.

4.1 Government-supported loan schemes

4.1.1 Green Deal

The Green Deal is an innovative financing mechanism launched in January 2013 that allows organisations and individuals to pay for energy efficiency improvements to their buildings through savings on their energy bills.

The Green Deal Oversight and Registration Body (ORB) manages the authorisation scheme for participants in the Green Deal – assessors, installers and finance providers. The ORB is also responsible for a number of functions aimed at providing effective administration and oversight of the scheme including the Green Deal Code of Practice and the use of the Quality Mark.

All Green Deal finance is based on a Green Deal Assessment that must be undertaken by an

accredited Green Deal Assessor. Visit www.greendealorb.co.uk/consumersearch to search

for a Green Deal Assessor, installer or provider.

The impartial and independent advice service relating to the Green Deal is delivered by the Energy Saving Trust, which can be contacted on 0800 512 012.

4.1.2 Resource Efficient Scotland SME loans

Funded by the Scottish Government, these loans aim to support businesses that are looking to reduce costs through improved energy, material resource and water efficiency. The scheme is aimed at Scottish businesses that fall within the EC definition of an SME, private-sector landlords, not-for-profit organisations and charities.

Loans are interest free (0%), unless applying for a renewable technology and the applicant is intending to receive the Feed-in Tariff or Renewable Heat Incentive. In these cases, the interest rate is 5%. The benefits include no set-up charges, an immediate and on-going reduction in costs and significant savings compared with other forms of finance. The loans are unsecured and the associated investment can be set against capital

allowances. However, the loan cannot be used for opportunities where Green Deal finance is available, but it can supplement partial Green Deal finance. Where Green Deal finance is not available, the cost of a Green Deal Assessment can be included in a subsequent loan

application, provided at least one of the measures recommended in the Green Deal Assessment has been implemented or will be implemented as part of the loan.

Applications must be supported by a qualifying report, normally developed by the Resource Efficient Scotland Advice and Support Service – phone 0808 808 2268. Please visit

www.energysavingtrust.org.uk/scotland/Organisations/Innovation/In-depth-energy-advice/Small-business-loans for further details and to download an application form.

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4.1.3 SME Implementation Fund

The Resource Efficient Scotland Programme, delivered by Zero Waste Scotland, is offering funding support during 2014/15 to support small and medium sized enterprises (SMEs) that wish to implement resource efficiency improvements within their organisations.

It is recognised that while organisations understand the benefits of resource efficiency, they often do not take action, lacking time and money to make the necessary changes. This fund has been designed to help organisations overcome these barriers through the provision of funding to pay for new personnel or the redeployment of existing personnel as a short-term skilled resource to undertake a particular project with a focus on raw materials use, waste prevention, energy use and/or water use.

www.zerowastescotland.org.uk/content/resource-efficient-scotland-programme-sme-implementation-fund-201415-brs015-000

4.1.4 Low Carbon Transport Loan

Funded by Transport Scotland, the Low Carbon Transport Loan has been set up to assist organisations across Scotland, including businesses and the public sector, meet the costs of a wide range of measures that help lower the carbon footprint of transport and travel, such as:

 video and teleconference facilities;

 cycle facilities including bicycles, storage racks and lockers;

 fleet management software;

 vehicle efficiency devices that do not void the manufacturer's warranty; and

 electric and plugged-in hybrid vehicles.

Please visit

www.energysavingtrust.org.uk/scotland/Organisations/Transport/Interest-free-low-carbon-transport-loan for more information on the scheme and to download an application form.

4.1.5 Regional loan schemes

A range of loan schemes are provided by economic development bodies across Scotland to support defined areas or specific sectors and activities. The terms, conditions, application procedures and requirements vary widely according to the individual schemes. They can be particularly useful for organisations with a limited business track record. Most schemes of this type have robust assessment procedures, so strong and detailed applications are normally required.

Examples include:

 East of Scotland Investment Fund – this scheme provides loans for the creation,

development and growth of small and growing businesses in the east of Scotland. It requires at least 50% of the total funding package to be provided by the private sector. Interest rates are fixed, currently at 6%, for the duration of the loan, with the

maximum repayment period being five years. Please visit www.eastscotinvest.co.uk

for further details.

 West of Scotland Loan Fund – this scheme provides loan finance to new and

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able to benefit the local economy in terms of job opportunities, wealth and growth. Eligible costs include investment in plant, equipment, purchase of business property and working capital for businesses operating in specific sectors. Please visit

www.wslf.co.uk for further details.

 Highland Opportunity Fund – this scheme provides low-interest loans to assist new

and growing businesses in the Highlands that have failed to secure funding from traditional sources. Eligible costs include working capital, equipment costs and refurbishing premises but, exclude agriculture, fisheries and accommodation. Please

visit www.highland-opportunity.com for further details.

 Support for Aberdeenshire Business Loans – this scheme provides interest-free

loans for the purchase of new or used plant and equipment for the additional economic benefit of Aberdeenshire. Applications must show the potential for additional

employment, the effect of the proposal on existing local businesses and the real need for top-up finance. Please visit

www.aberdeenshire.gov.uk/support/finance/sab.asp#loans for further details. To find out more about what schemes operate in your area, contact the economic development team in your local authority.

4.1.6 Scottish Loan Fund

Part-financed by the Scottish Government, the Scottish Loan Fund (SLF) provides mezzanine loans from £250,000 to £5 million to qualifying Scottish businesses on a

commercial basis. Mezzanine finance is a hybrid product that sits between traditional bank debt and equity within the capital structure of a business. It is typically used to fund the growth of companies.

The fund is designed to help SMEs secure funding for opportunities that drive growth. You may:

 be looking to bolster your working capital to ensure your business can deliver on new

contracts;

 have a capital expenditure requirement that is key to the fulfilment of your business

plan; or

 require additional development capital to support new products.

The SLF has been established to address such needs. Therefore, it could be an important tool in achieving your growth aspirations. It is an attractive funding solution for SMEs, as the unique position of mezzanine finance maximises flexibility. Please visit

www.mavencp.com/scottish-loan-fund.aspx for further details.

4.2 Other Government-supported schemes

There is a variety of other Government-supported arrangements that can help provide funding for your resource efficiency improvements. The main schemes are explained below. 4.2.1 Enhanced Capital Allowances

Capital allowances are sums of money a UK business can deduct from the corporate or income tax it pays on its profits. The Enhanced Capital Allowance Scheme enables

businesses to claim a 100% first-year capital allowance on investments in certain energy and water saving equipment, against the taxable profits of the period of investment. This

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allows investments to be made in resource efficiency improvements at much lower cost to the business than would otherwise be the case. A wide range of energy and water saving devices can be funded through this arrangement.

Please visit www.etl.decc.gov.uk/etl/site/etl.html for a list of the energy saving products.

Please visit http://wtl.defra.gov.uk for further details of the water saving products.

4.2.2 Climate Challenge Fund

The Scottish Government's Climate Challenge Fund provides grants for not-for-profit

community groups wanting to tackle climate change and make community improvements by reducing their carbon emissions. These groups also receive support from Keep Scotland Beautiful which administers the scheme.

Projects can include investment in improving the energy efficiency of community buildings,

providing that it is part of a wider project. Please visit http://ccf.keepscotlandbeautiful.org/

for further details.

4.2.3 Low Carbon Skills Fund

The Low Carbon Skills Fund is designed to help businesses develop the skills they need to exploit the transition to a low-carbon economy. It gives Scottish businesses with fewer than 250 employees the opportunity to apply for up to £12,500 towards employee training costs. The scheme provides funding for up to 25 episodes of training and 50% of training costs – up to a maximum of £500 per episode.

Eligible training includes:

 renewable energy, low carbon technologies and micro-generation;

 energy efficiency, and environmental and clean technologies;

 waste management and re-use; and

 reducing carbon emissions in the supply and energy management.

Please visit www.ourskillsforce.co.uk/develop/low-carbon-skills-fund for further details.

4.2.4 Community and Renewables Energy Scheme (CARES)

CARES has been established by the Scottish Government to encourage the local or community ownership of renewable energy across Scotland. It is a one-stop shop that provides support, advice and loans to community groups and rural businesses wishing to generate renewable energy or gain benefit from local commercial renewable energy

schemes. It is designed to accelerate progress towards the Scottish Government’s target of 500MW of renewable energy to be locally or community owned by 2020 and to maximise the benefits to communities from commercially owned energy. Please visit

www.localenergyscotland.org for more information about the scheme or call 0808 808 2288. 4.2.5 Feed-in Tariff and the Renewable Heat Incentive

The Feed-in Tariff (FIT) and the Renewable Heat Incentive (RHI) provide income to encourage investment in renewable electricity projects (FITs) and renewable heat (RHI).

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Please visit www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Feed-In-Tariffs-scheme-FITs for further information on FITs.

Please visit

www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Renewable-Heat-Incentive-RHI3 for further information on the RHI. 4.2.6 District Heating Loan Scheme

The Scottish Government’s district heating loan fund provides loans for low carbon and renewable technologies to help organisations implement district heating projects to benefit local communities.

Please visit

www.energysavingtrust.org.uk/scotland/Take-action/Get-business-funding/District-heating-loan-fund2 for further information. 4.2.7 eQuip

‘eQuip’ is a leasing scheme set up by WRAP (the Waste & Resources Action Programme). It helps organisations working in the waste management sector to secure financial assistance for new and second-hand recycling plant and machinery. Businesses can qualify for the scheme if they sort, reprocess, recycle or manufacture products using one or more materials include plastic, organics (in-vessel composting or anaerobic digestion only), textiles, glass or wood (only treated/contaminated wood).

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5 Further information and support

Resource Efficient Scotland has a team of experienced advisors that has helped hundreds of organisations across Scotland take action to improve their resource efficiency. We

understand that accessing finance can often seem like a barrier to the successful

implementation of resource efficiency projects. Our team is here to help you turn your ideas for improving your resource use into a cost-saving reality. We can help you now by:

 advising on the best funding mechanism;

 providing support in developing a robust project business case; and

 conducting a financial readiness review.

If you need further support on any of your resource efficiency projects, please contact the

team by emailing [email protected] or calling 0808 808 2268.

In addition, the Scottish Government’s Finance Scotland programme, delivered in partnership with local authorities, enterprise agencies and other public bodies, has a website that will help your decision-making. It is available here:

www.finance.scotland.gov.uk

It provides practical information and support on finance and funding to help you start up and grow your business. This includes preparing to raise finance, the types of funding available, the criteria and how to apply. Finance.Scotland can also help you find funding options to meet your business needs and provide general support.

This includes:

 ensuring your company is prepared and ready to raise finance;

 reviewing and comparing the best types of funding available to meet your business

needs; and

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