Sustainable business is becoming more relevant. Not only because of unfolding sustainability reporting regulations but also because gas and energy prices are rising at tremendous speed. There are several sources of green money available for small businesses, including the UK government, one of the devolved administrations, and local councils. The easiest approach to stay up to speed with the most recent financing choices is to check out the different options per sector, as presented in this blog post.
At least half of the SMEs in the UK have shown to invest in sustainability, according to recent reports. However, incorporating sustainability is costly to many businesses. To avoid the willingness of businesses being obstructed by practicalities or money, many options to fund such transition are established in both the private and public sectors. Before approaching lenders, it is important to prepare yourself. In other words, it is important to know what lending structure suits your company best and what requirements are associated with such. This blog is to familiarize SMEs with the general options in the first place, namely the government, banks and other companies respectively.
To support SMEs that are willing to engage in sustainable business, about £5 billion in funding is currently available as part of the government’s pledge to achieve net zero emissions by 2050. Keep a watch on the government’s green financing webpage for the most recent vacancies because the list is continually being updated as new funding becomes available. The Department for Environmental, Food, and Rural Affairs (DEFRA), which also runs programs to assist companies in becoming more sustainable, would be worth checking out as well. At times, local councils also provide the option to loan money.
Include your company bank in your hunt for sustainable funding because they may give loans for eco-friendly projects or endeavours. Generally, the biggest UK-based banks do have some option to loan money for a fixed period. The conditions naturally differ per bank and SME. Also, if websites do not provide the necessary information, contacting the respective bank may lead to a conversation on structuring such a loan. Remember, banks are often willing to contribute to sustainability if your business can present a well-structured plan. Examples of sustainable loans are Barclays Bank, HBSC and NatWest.
Other funding options
The additional forms of financial assistance that are available to businesses for green initiatives, like government grants, depend on your area and type of enterprise. In general, this option is to be explored by the SME itself through (online) networking and investigation. Sustainability-related investment funds often demand a rigid business plan to ensure the profitability of the investment. Also, such initiatives tend to be slightly more content- and topic-focused. For instance, the Low Carbon Innovation Fund (LCIF) invests in sustainable technology plans based in the East of England.
In navigating through the different options, it is central to know what the purpose of the loan would be. A so-called sustainable business plan should therefore build on the current situation, in terms of sustainability. From there, tangible points may be selected and invested in. Eevery is committed to providing an objective report on current affairs, wherefrom points of improvement can be formulated.
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