Funding information: Aarubi Finance Ltd is not authorised or regulated by the Financial Conduct Authority. We provide Merchant Cash Advance services with YouLend and 365 Finance and may introduce eligible businesses to selected unregulated commercial finance providers. We do not provide consumer credit, regulated mortgages or personal financial advice. Eligibility and terms apply. This article is general information, not individual financial, legal or tax advice.
An energy-saving installation can reduce consumption, but financing it adds a commitment. Assess the equipment and the funding separately: an attractive saving estimate does not prove that the repayment schedule is affordable.
Our business finance FAQs on costs and affordability provide a useful starting point.
Establish what the upgrade could save
Gather a representative set of bills and consumption readings, including seasonal differences. Ask the installer to explain the baseline, operating hours, equipment performance and assumptions behind the projected saving.
The Carbon Trust's energy-management guide provides a framework for measuring and managing consumption. It is guidance, not evidence that a particular grant or funding programme is currently open.
Separate lower energy use from a change in tariff. A lower unit price reduces the value of each unit saved, even though it may reduce the total bill. Do not count the same saving twice.
Compare financing structures
| Structure | Questions to resolve |
|---|---|
| Hire purchase | When do you own the equipment, and what deposit or final payment applies? |
| Lease | Who owns, maintains and insures it, and what happens at the end? |
| Business loan | Are installation costs permitted, and what security or guarantees are required? |
| Own funds or a confirmed grant | What cash reserve remains, and what conditions or deadlines apply? |
The British Business Bank explains leasing and hire purchase. Availability and tax treatment depend on the agreement and circumstances. Ask your accountant rather than assuming all repayments receive the same tax treatment.
Model the project in pounds
Request an itemised quote for equipment, installation, commissioning, maintenance and any other required work. Model the upfront deposit, ongoing payments and expected savings month by month.
A simple illustrative calculation: £12,000 project cost divided by £3,000 annual net operating savings gives a four-year simple payback before financing costs. It is not a quote or prediction. Financing charges, timing and changes in performance can alter the result.
Test lower savings, delayed installation and higher maintenance costs. There is no reliable universal rule to discount savings by 30%, or to set a finance term within 20% of payback. Use evidence specific to the site.
Check the term and premises
Consider useful equipment life, warranty, expected occupation of the premises and any landlord consent. Ask what happens if the business moves, closes or needs to replace the equipment before the agreement ends.
A longer term can reduce individual payments while increasing total cost. Matching a term to estimated payback alone is not enough: payments must still be manageable during the months before savings are established.
Review energy costs without promising a saving
A business energy review can help check tariff terms and renewal options. A fixed contract may restrict when you can switch, and a new tariff is not guaranteed to be cheaper. Our energy FAQs explain the contract questions to ask.
Before proceeding, obtain:
- An itemised project quote and evidenced savings assumptions.
- A complete funding quotation and repayment schedule.
- Confirmation of ownership, maintenance and premises permissions.
- A downside cash-flow forecast.
- Independent advice on tax, guarantees and other contractual risks.
AARUBI may introduce eligible enquiries to selected commercial providers; we do not promise every equipment-finance product or installation service. Review our finance role and options before enquiring.
