SMEs seek finance to meet green targets
Small- and medium-sized enterprises (SMEs) are increasingly focused on finding finance to boost their green targets.
According to new research from Allica Bank, 65 per cent of commercial mortgage brokers and 76 per cent of asset finance brokers said that they have seen an increase in loans for the purpose of sustainability.
This trend is being driven by SMEs prioritising upgrades of inefficient machinery, the bank said.
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26 per cent of commercial mortgage brokers and 70 per cent of asset finance brokers have noticed an increase in the number of SMEs seeking finance to buy electric vehicles. Meanwhile 35 per cent of commercial mortgage brokers and 28 per cent of asset finance brokers have seen more business borrowers seeking to improve the green credentials of their existing premises.
“While there are serious challenges ahead for business owners, this could be a catalyst for some significant jumps forward in the UK’s efforts to achieve net-zero,” said Nick Baker, Allica’s chief commercial officer.
“The combination of a worsening climate crisis and soaring energy costs will make improving energy efficiency a no-brainer for many businesses.
“Whether it’s better insulating your premises, electrifying your fleet, upgrading machinery, or moving to new premises altogether, it can all help cut monthly outgoings in the long run.
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“However, due to the significant upfront cost of many of these projects, brokers are going to play a pivotal role, as a growing number of clients seek the finance to fund them. Those brokers well-versed in how to make a strong funding application for green energy projects will be able to add significant value.”
Allica Bank suggested that the new focus on sustainability is partly to help combat rising costs, with 88 per cent of asset finance brokers and 66 per cent of commercial mortgage brokers saying that the cost of living crisis has impacted their SME customers’ 2022 business plans.
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