Growing number of SMEs seek finance to achieve sustainability goalsĀ 

New research from Allica Bank shows SMEs have a heightened focus on finding finance to boost their sustainability, with 65% of commercial mortgage brokers and 76% of asset finance brokers saying they have seen an increase in the number of ā€˜green loanā€™ enquiries. 

The bankā€™s quarterly broker survey shows the trend is being driven by SMEs prioritising the upgrade of inefficient machinery, with 48% of commercial mortgage brokers and 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%).

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

Allica believes that the focus on sustainability is partly to help combat rising costs, with 88% of asset finance brokers and 66% of commercial mortgage brokers saying they have impacted their SME customersā€™ 2022 business plans.

Earlier this year, Allica Bank announced it would reduce its commercial mortgage rates by 0.25% for prime properties with an EPC rating of A-C, in an effort to support businesses looking to reduce their carbon footprint.

Nick Baker, Allicaā€™s chief commercial officer, said the increase in businesses improving their energy efficiency doesnā€™t just make sense from a climate perspective, but from a business perspective too:

ā€œWhile there are serious challenges ahead for business owners, this could be a catalyst for some significant jumps forward in the UKā€™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.

ā€œWhether itā€™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.

ā€œHowever, 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.ā€

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