Financing a greener business

One day, the conversation won't be all about Covid, or at least it won't be the first topic on our lips.

When the world gets back to some sort of normal, the focus will return to other burning issues, including the environment (pun intended). For all the economic havoc the pandemic has wreaked, the world-wide shutdown of transport and industry has had a positive impact on global warming and air quality.

Now it seems there is a real sense of wanting to hold onto the gains and create something lastingly good out of the pandemic. Whether it is in national governments or the smallest of small businesses, the shift towards greener practices and policies is really gaining momentum.

Some decisions, of course, are being taken out of the hands of businesses and consumers as governments shift from subsidies to regulation in order to achieve targets. We only need look at what is happening in the vehicle industry for evidence of this.

But we don't have to wait for legislation to catch up. Green vehicle fleets are already becoming more common. Some large businesses have made very public commitments. Amazon has reportedly ordered 100,000 electric delivery vans and has pledged to run on 100% renewable energy by 2025. You might not compare your business to Amazon, but these decisions set trends - and matter to customers.

Closer to your own pocket, the low benefit-in-kind tax on electric vehicles is driving a move back to company cars. This is something worth talking to your accountant about when considering the next change, either for yourself or an employee.

Another approach is to re-think the ‘buy, use, dispose’ mentality that we have all become accustomed to and adopt a recycle policy instead. Some forms of leasing are particularly suited to this circular economy model. For example, the leasing providers have expertise in providing use of vehicles and machinery for a specific period, managing the delivery and collection process, and accurately estimating its value on return.

With many business assets currently lying idle due to Covid-19 lockdowns, including 34% of the UK's desktop PCs, now seems an opportune time to think about the benefits of aquiring assets on a 'pay per use' basis. 

The finance industry is working hard to respond to changing demands with tailored products. We understand that a range of finance providers and manufacturers are currently exploring products and partnerships to deliver circular economy solutions, ranging from subscription services for IT equipment to recovery and recycling programmes for cars. Virgin Money is said to be close to offering loans to businesses with green credentials and will assess potential borrowers against environmental and social governance criteria.

Of course, you don't need a specifically 'green' loan to make a positive change in your business. Leasing has been around for decades and you can buy electric vehicle charging points, solar panels or any other type of more energy efficient equipment with a straight forward business loan. 

If you are one of the many business owners wanting to reduce their business's carbon footprint, have a chat with us about how a finance package could help. We can access multiple leasing and lending providers to help you achieve your aims.

Financing a greener business

By: Neil Edwards

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