Green business loan schemes for smaller businesses Susan Elliott, Senior Manager UK Networks, British Business Bank
While there are many benefits to becoming a more sustainable business, investment is one of the biggest challenges to decarbonisation and green business operations. According to research by the British Business Bank, 11% of SMEs – roughly 700,000 smaller businesses – have accessed external finance to support net zero actions and 22% are prepared to access external finance to do so within the next five years. Finding funding to invest in more sustainable operations can be a challenge. There are numerous incentives and grants available to support transitions to, for example, zero and ultra-low emission vehicles. Other types of investments are centred on loans from commercial institutions such as banks. Green loans offered by banks and other financial institutions may be an option. Green loans to SMEs are typically restricted to funding sustainable business activities such as investment in renewable energy, green buildings and pollution prevention. Here are some examples of banks and funds that offer green loans for smaller businesses*. However, it's essential that you shop around and get professional, independent financial advice when sourcing funding for your business, as loans may not be suitable for all businesses. Loans can be more expensive to pay back than the initial capital loaned to your business, and some may require security such as business or personal assets. Loans are subject to status, application and eligibility, so there’s no guarantee that you will be approved for finance. • • •
Business Climate Hub businessclimatehub.org/uk/ HSBC (Green SME Fund) business.hsbc.uk Lloyds (Clean Growth Financing Initiative) lloydsbank.com/business/home.html
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Barclays (Green Loan) barclays.co.uk/business-banking/ Virgin Money (Sustainable Business Loan) uk.virginmoney.com
The British Business Bank is the UK’s business development bank, with a mission to drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy by improving access to finance for smaller businesses. The British Business Bank’s Finance Hub provides independent and impartial information and resources on access to finance – including guidance for how to create a sustainable business and prepare for green growth. Find out more and take action with green business guides, jargon buster and helpful explainers. * Reference to any organisation, business and event within this article does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.
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