Announcing the move at today’s Chartered Institute of Waste Management (CIWM) conference in London, waste minister Lord Taylor of Holbeach said the new Waste Prevention Loan Fund would «aid more businesses to plot the course to a more resource efficient future».

He added that the new funding was further evidence of the government’s belief that projects to enhance resource efficiency were «not only good for the environment but also makes good business sense».

The new fund will be administered by the government-backed Waste and Resources Action Programme (WRAP) and will provide grants worth up to £50,000 for investment in new equipment and loans of between £100,000 and £1m to resource efficiency projects, as well as business development support designed to ensure projects are properly managed.

A spokeswoman for the agency said businesses, local authorities and charities would now be invited to apply for the loans or grants to fund new business models where traditional sources of finance «may not see the commercial case».

For example, the organisation expects to consider initiatives that reduce waste levels by shifting a business model from product sales to leasing, or creating customer incentives for the return of products for remanufacture, reuse or recycling.

All material streams are eligible to apply for funding, although successful applicants will have proven concepts in place and will only require financing to scale up projects to a commercial level.

While the new fund will support projects that may struggle to find finance elsewhere, WRAP insisted it would «look at each application on a case by case basis and charge a rate of interest equivalent to a commercial rate in most instances».

«WRAP’s new financial support package to businesses aims to take advantage of the great creative and entrepreneurial spirit across England,» said Matthew Broadbent, head of financial mechanisms at WRAP.

«Finding smart ways to prevent waste arising in the first place and then reuse or repair what is created makes pure business sense. We know there are lots of creative ideas out there so we’re looking for opportunities to scale these up to really make a bigger difference, driving green growth further and faster.»

The news comes just days after WRAP announced new funding awardsto seven waste contractors designed to support the development of food waste collection services for businesses such as restaurants and other food service firms.