Business finance marketplace Funding Options launched the first Green Finance Marketplace for SMEs to help businesses source the right funding to achieve their sustainability goals.
Swishfund and Cambridge & Counties Bank have joined the platform’s Green Lender panel. Funding Options’ initiative is in line with the UK Government’s Together for our Planet campaign which urged SMEs to take steps to cut emissions in the run-up to the UN Climate Summit COP26 in Glasgow this November.
Accelerating the provision of green finance to SMEs will enable small changes which are pivotal to supporting the delivery of the UK’s SME Climate Commitment to cut greenhouse gas emissions in half by 2030 and to zero by 2050.
Given that UK SMEs responsible for approximately 25% of the nation’s CO2 emissions, this initiative will help drive sustainability in the SME lending market by connecting businesses to the funding they need to help them reach net zero.
The Green Finance marketplace will help to bring greater transparency and awareness of the funding options available to support SMEs – with financial products increasingly rewarding businesses that consciously seek to reduce their carbon footprint. The marketplace will leverage data analytics and open banking APIs to ensure that green borrowers are matched with the appropriate lenders, incentivising SMEs to focus on their environmental footprint.
Companies will be able to access funding through the Green Finance marketplace to facilitate the purchase of ‘green assets’ such as solar panels or clean vehicles. Lenders will also be matched with ‘green businesses’ displaying strong environmental credentials, such as those participating in renewable, low/zero carbon or sustainable activities. Additionally, the platform will connect ‘green businesses’ – those providing verifiably sustainable products, services or working on a green project – with the right funding partner.
Lenders are increasingly looking to be matched with borrowers with strong environmental credentials, those which are operating low or zero-carbon business models. This demand is so that they can achieve ESG compliance, which asset and fund managers are increasingly considering when offering credit lines to lenders.
Highlighting the importance of prioritising climate friendly options, Funding Options CEO Simon Cureton said, “Funding Options sits at the heart of the SME lending ecosystem, giving us the power to ensure ‘green demand’ is met with ‘green supply’ through our data-driven Funding CloudTM platform. We are in agreement with the UK Government that small and medium-sized enterprises are the economic backbone of the UK and so providing access to the best funding options will greatly assist them to implement more sustainable processes, business models and consumption patterns, paving the way for a green future.”
Cureton added that as the green finance market for SMEs matures, there will be greater opportunities to support a wider range of businesses by offering lower product pricing to green SMEs to encourage them to become more sustainable. He said, “Our own wider sustainability policy and commitment is to play a leading role helping to drive environmental and social governance in the alternative lending market, while at the same time promoting a broader choice of competitive green finance options for our customers.”
Echoing a similar sentiment, Swishfund MD Andrew Jackson added, “This is an important step in increasing awareness of environmental issues within the SME community. Since people usually pay attention to only what is directly in front of them, it is incumbent on all businesses to keep green initiatives at a prominent place in their shopfronts, their offerings, and in their brands. We believe that within 20 years from now environmental and social responsibility will be a prerequisite for commercial success.”
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