Many smaller companies nonetheless face limitations when making an attempt to entry inexperienced finance merchandise, a brand new report has discovered.
Analysis from the Lending Requirements Board (LSB) the self-regulatory physique for banks and lenders, discovered that demand for, and curiosity in, sustainable finance is rising.
Nevertheless, smaller corporations trying to enhance their environmental impression are going through limitations in accessing these merchandise because of macroeconomic challenges and a lack of awareness concerning the inexperienced finance choices out there.
Learn extra: MPs launch inquiry into SME lending
The LSB recognized round 15 merchandise at present being supplied to small companies particularly for inexperienced functions, though take-up is low. Inexperienced loans have been the most typical product supplied, most of which have been aimed toward small- and medium-sized enterprises (SMEs) trying to make effectivity enhancements to their premises or journey preparations, resembling electrical automobile purchases.
Separate analysis from the British Enterprise Financial institution (BBB) discovered that round half of SMEs are open to enhancing their environmental impression and 22 per cent are ready to make use of finance to put money into modifications. Nevertheless, the respondents stated they have been delay by components like value, capability, and uncertainty over the lack of awareness on the inexperienced finance choices out there.
Learn extra: The European platforms on the forefront of inexperienced lending
The LSB additionally famous that SMEs have had to deal with unfavourable financial occasions over the previous two years, which means that they’ve centered on staying afloat reasonably than sustainability.
“Because the drive to transition to internet zero continues to accentuate, corporations must be contemplating, throughout all finance merchandise, how they can assist clients to realize their inexperienced targets, while balancing the consequences of the broader panorama,” stated Emma Lovell, chief govt of the LSB.
“For patrons trying to borrow or use finance to make modifications which can be constructive for the atmosphere, corporations must be understanding how their merchandise – whether or not they’re labelled as inexperienced or sustainable, or not – can assist the SME’s targets.”
Learn extra: Direct lending is greatest option to go inexperienced
The LSB has launched a session into lending requirements for enterprise clients, which places the problem of inexperienced finance for SMEs into account.
The LSB is welcoming responses to the problems raised within the session, and any associated suggestions, by 10 August 2023.