The Carbon Trust has doubled the amount of money it will loan companies to make energy efficiency improvements to £200,000 and increased the total pot by 45% to £31m.

The move is designed to ensure small businesses continue to invest in such initiatives despite the current economic climate and the government body hopes to increase the amount of carbon saved by 20% this year as a result.

"Small firms want to play their part in tackling climate change, and reduce their energy costs at the same time," said Hugh Jones, solutions director at the Carbon Trust.

"But in the current economic climate, the tighter credit conditions are making it harder for small businesses to find alternative sources of funding.

"£200,000 loans pave the way for companies to take on such projects and significantly reduce both their carbon emissions and their energy bills, which in turn will enable them to reduce operational costs and become more competitive."

The Carbon Trust loans are interest-free and can be repaid over a period of up to four years.