Dragon fires up SMEs to take on green business loans

The Carbon Trust has signed up serial entrepreneur Theo Paphitis to promote the adoption of interest free low carbon loans amongst small and medium-sized businesses (SMBs).

Paphitis, who is one of the stars of the BBC's Dragons Den, is to feature in a radio advertising campaign for the Carbon Trust designed to raise awareness of the £31m pot it is aiming to offer as interest free loans to companies attempting to cut their carbon footprint.

The loans of up to £200,000 are interest free, unsecured and repayable over four years, and can be used to fund investment in a wide range of energy saving technologies and initiatives.

"Only a fool would say "I'm out" to the Carbon Trust's offer of an interest free loan to reduce your business's carbon footprint," said Paphitis. "The current economic climate means making your business more energy efficient is vital for improving your bottom line as well as making your company as environmentally sustainable as possible."

Hugh Jones, solutions director at the Carbon Trust, said that the loans would help SMBs fund carbon and energy saving projects that often require significant up front investments, "such as large lighting installations, boilers projects, or multiple equipment purchases such as variable speed drives with compressors and heat recovery equipment".

The advertising campaign follows an increase in the Carbon Trust's annual loan fund of £10m. The government-backed company claims that the £21.5m of loans allocated in 2007/08 helped reduce yearly carbon emissions by over 60,000 tonnes and resulted in cost savings of nearly £9 million a year for the business invovled.

The loans are one of wide range of incentives and tax breaks available from the government to support business investment in energy efficient and carbon saving technologies. However, the government has been criticised by some business groups for not promoting awareness of incentives, such as Enhanced Capital Allowances and other tax breaks, widely enough.