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August 31, 2022updated 02 Sep 2022 10:50am

Growing number of SMEs seeking finance to achieve green goals: poll

By Alejandro Gonzalez

New research from Allica Bank shows SMEs have a heightened focus on finding finance to boost their sustainability, with 76% of asset finance brokers saying they have seen an increase in the number of ‘green loan’ enquiries.

The bank’s quarterly broker survey shows the trend is being driven by SMEs prioritising the upgrade of inefficient machinery, with 72% of asset finance brokers saying their clients sought finance to help fund these projects. Behind this came buying electric vehicles (26% and 70%, respectively) and improving the green credentials of their existing premises (35%, 28%).

A total of 61 asset finance brokers completed the survey with a response rate of 20.4% among the 299 brokers who were sent the survey, which “is in line with industry best practice and gives us quality data and insights,” Allica said.

Interestingly, nearly a fifth of commercial mortgage brokers also said they’d seen a growing number of clients reach out to them for help specifically to move their business to more energy-efficient properties.

Allica believes the focus on sustainability is partly to help combat rising costs, with 88% of asset finance brokers saying they have impacted their SME customers’ 2022 business plans.

Nick Baker, Allica’s chief commercial officer, said the increase in businesses improving their energy efficiency doesn’t just make sense from a climate perspective, but from a business perspective too:

“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. 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.

“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.”

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