7 months ago
At a moment when environmental sustainability has become an urgent priority for many businesses in the UK, green energy projects are gaining traction as a solution to reducing carbon footprints and introducing more sustainable ways of working.
In June 2019, the UK Government pledged to cut the UK's net greenhouse gas emissions by at least 100% by 2050, compared to 1990 levels. This ambitious target was labelled ‘net zero’ and is now enshrined in law with specific milestones along the journey to an emissions-free economy.
As more companies recognise the importance of sustainability efforts, the demand for funding for these initiatives has also grown. In this guide, we’ll walk you through the various options available to your business, including how to propose your project and secure the finance you need to make your vision a reality.
Green energy projects cover an array of initiatives that use renewable resources to generate clean and sustainable power. If you want your business to become more sustainable, a good place to start is to evaluate your current practices, processes, and supply chain to identify areas where you can reduce waste, energy consumption, and environmental impact.
Aside from the small changes we can all make easily, like recycling more, cycling to work, or using less water, your business might choose to invest in green technology. Some of the most popular options are making your fleet of cars or vans electric, installing solar panels, and investing in a biomass system. As well as doing good for the environment, these changes can potentially save your business money in the long term. However, while green energy projects have many benefits, they often require a significant outlay initially.
When it comes to funding your sustainable ventures, there could be several avenues open to you. Government grants are an excellent option for British businesses, with almost £5 billion available to help UK businesses become greener as part of the UK Government's commitment to reach net zero emissions by 2050. You can use the Government website to find the appropriate funding for your business needs and check your eligibility for each type of funding.
Tax incentives might also make investing in a green energy project more feasible for your business. The UK Government has introduced ‘environmental taxes’, designed to encourage companies to adopt more eco-friendly practices through various schemes. For example, you can claim capital allowances if you invest in efficient or low-carbon technology.
Another option to access the required finances to kickstart your project is to secure a business loan. Before applying, you should consider the funds you will need, interest rates, repayment terms, and, of course, your eligibility. Before approaching lenders, you should develop a detailed plan outlining your project's objectives and financial projections.
If you choose to go down the business finance route, it’s vital to ensure you’re fully prepared for your application in order to have the best chance at approval. Determine the exact amount of money you’ll need to complete your green energy project. You should also be specific about the ways in which the loan will be used.
Lenders will need to see some documentation in order to assess your business's financial health and ability to repay the loan. You should make sure you have a business plan, balance sheets, bank statements, tax information, and any relevant licences or registrations to hand.
Your business’s credit score will also play a significant role in the application process. It’s always a good idea to request a credit report and review it for any issues if you’re unsure about your standing. You can check your Experian Business Credit Score for free at Capitalise by clicking the button below:
At BusinessComparison, we can help you find the best finance options for your business and sustainable ventures. We compare business loans with the top providers from high street banks to smaller specialist lenders.