Green business grants and loans: A sustainable funding list
With the global climate crisis at the forefront of consumers’ minds, small businesses are looking for ways to become more sustainable.
As well as help and support from the government, there are several organisations across the UK offering financial support, incentives and loans to businesses taking steps to become more eco-friendly. The type of support available depends on the kind of business you run and where you’re based in the country.
Here, SSE Energy Solutions has compiled a list of those organisations to help your small business on the road to net zero.
Click the links below to jump to each section on:
Government funding for green business
Whether it’s the UK government, one of the devolved administrations, or at a local council level, there are a number of green funding opportunities available for small businesses. We’ve listed some of the green government grants available and included links to their websites, which is the best way to stay updated with the latest financing options.
UK government
There’s almost £5 billion of funding available to help UK businesses as part of the government’s commitment to reach net zero emissions by 2050. The funding will be awarded to businesses investing in green technologies to increase energy efficiency or reduce carbon emissions. The list is constantly being updated as new funding becomes available, so keep an eye on the government’s green funding webpage for current openings.
You might also want to check out the Department for Environmental, Food and Rural Affairs (DEFRA), they too run initiatives to help businesses become more sustainable and you can sign up to receive their email alerts.
Scottish government
Scotland has ambitious targets to become net zero by 2045, five years ahead of the rest of the UK. To meet this target, the Scottish government is funding several programmes and initiatives to help businesses reduce their emissions and transition to net zero.
To find out more about how the Scottish government is engaging with businesses on climate action, you can visit their website here. And to browse the latest sustainable funding available for Scottish businesses, click here.
Welsh government
In March 2022, the Welsh government confirmed its commitment to net zero by announcing a new business initiative. The ‘Net Zero Industry Wales’ has been set up to decarbonise Welsh industry and create jobs in the green industries of the future. It’s not yet clear whether small businesses will be able to apply for direct funding through this initiative, but it’s worthwhile keeping an eye on their website.
In the meantime, you can find out about current funding options available to Welsh businesses by visiting their finance locator here.
Northern Irish Executive
The Department of Agriculture, Environment and Rural Affairs (DAERA) is responsible for food, farming, environmental, fisheries, forestry and sustainability policy in Northern Ireland. DAERA offers a wide range of grants and funding to support Northern Irish businesses and organisations.
Go to their website to learn more about their sustainable funding opportunities.
Local councils
Your local authority might have funding available to support you in making your small business more sustainable. The funding options will vary from council to council, so check out your local authority’s website or give them a call to find out what’s available to you.
If you’re not sure what local authority your business falls under, just visit gov.uk/find-local-council and enter your business’s postcode.
Green bank loans for small businesses
Your business bank might offer loans for green projects or activities, so it’s worthwhile including them in your search for sustainable funding. We’ve detailed some of the green financing options available from some of the major UK banks below. But if you don’t see your own bank listed, it might be worthwhile contacting them directly and asking if they offer anything similar.Lloyds Bank - Clean Growth Financing Initiative
Businesses can access discounted lending through the Clean Growth Financing Initiative which aims to support a broad range of sustainable investments. Lloyds Bank teamed up with specialist sustainability consultants to develop a list of qualifying green projects which include small-scale incentives to large-scale infrastructure builds.
Find out more about the Clean Growth Financing Initiative at the Lloyds Bank website here
Barclays Bank - Green trade loans
Barclays Bank offers green trade loans for regular or one-off purchases of goods and raw materials to support a variety of purposes. These include energy efficiency, renewable energy and sustainable food production.
Go to the Barclays website for more information on their green trade loans.
HSBC UK - Green SME Fund
In 2021, HSBC announced the launch of a £500 million Green SME Fund as part of its commitment to support businesses of all sizes to transition and thrive in a low carbon economy. The fund is available for businesses with a turnover of less than £25 million and will offer 1% cashback on loans, starting from £1,000, to help SMEs invest in green activities.
Click here to find out more about the HSBC SME Fund.
NatWest – Green Loans
A Green Loan from NatWest can help businesses finance their sustainability targets. There is a list of eligible green activities which is subject to review and change on an ongoing basis. However, businesses can expect to be able to fund things like solar panels, electric vehicles and heat pumps.
Read more about the criteria for the NatWest Green Loans.
Other funding for green businesses and sustainable projects
Like government grants, the other financial support available to businesses for green projects depends on your location and type of business.Here, we’ve noted some of the recent grants available to businesses. But if you want to stay up to date with the latest sustainability initiatives in your area, you could join your local chamber of commerce and connect with likeminded businesses.
WRAP (Recycling grant)
WRAP is a UK-based NGO whose mission is to tackle the causes of the global climate crisis and give the planet a sustainable future. Their grants, loans and investments have an emphasis on recycling and reducing waste so would be good for organisations who want to increase their capacity for recycling and use more recycled materials.
Go to WRAP’s grants and investments webpage.
Low Carbon Innovation Fund (LCIF)
The Low Carbon Innovation Fund is investing over £100 million for SMEs in the East of England who are developing or introducing environmentally beneficial technologies. And while they only invest in companies that are expected to make a measurable contribution to greenhouse gas reduction, they invest in companies both in the early and late stages of their ventures.
For more information, go to the Low Carbon Innovation Fund (LCIF)
Low Carbon Across the South and East (LoCASE) programme
The Low Carbon Across the South and East (LoCASE) programme aims to help businesses become more competitive and profitable while protecting the environment and encouraging low carbon solutions. LoCASE provides grants of up to £10,000 as well as training workshops and fully funded events.
Find out if you’re eligible by going to the LoCASE website.
Circular Economy Investment Fund
Administered by Zero Waste Scotland, the Circular Economy Investment Fund is an £18 million funding opportunity for small and medium sized businesses and organisations in Scotland. They want to fund innovative projects that can deliver carbon savings, leverage investment and create jobs.
If you found this page useful, check out our small business sustainability hub for more free tools, tips and expert advice.
We try to update this page regularly to bring you the latest grants and support packages available to small businesses. However, this page might not always contain the most up to date information as we can’t always respond to new updates and changes as quickly as we’d like to.
Please note, SSE Energy Solutions has written this blog for information purposes only. We recommend speaking to your own business and financial advisors directly before taking any direct action that will impact your business.