Sustain to gain 35 www.aftermarketonline.net JUNE 2025 Funding a green business agenda Joe Phelan, money.co.uk business loans expert, on how finance can help small enterprises get on track and drive ahead sustainably UK small and medium-sized businesses (SMEs) are making significant strides on the road to decarbonisation and are currently outpacing many of their European counterparts. However, access to finance remains a major barrier for those aiming to accelerate their progress. In the UK, an SME is defined as a business with fewer than 250 employees and a turnover of less than £50,000,000. According to recent data from the Department for Business, Energy & Industrial Strategy, the wholesale and retail trade sector, including vehicle repair workshops, accounted for 14% of all SME employment and 35% of SME turnover in the UK private sector in 2021. But going green is not just good for the planet, it’s good for business — whether it’s a small garage business or something bigger. Larger firms and public sector buyers increasingly demand transparency around sustainability, with 90% only working with ESG-conscious suppliers. For customer-facing brands, ecocredentials boost loyalty and trust, especially among younger consumers. And it pays off. Companies improving their environmental impact are more likely to see financial growth, proving that sustainability and profitability often go hand in hand. In fact, UK SMEs are leading the way in adopting structured, measurable approaches to decarbonisation. According to research from energy services provider Equans, 94% of UK industrial SMEs that have started decarbonising are doing so through a formalised framework — significantly higher than the European average of 80%. This highlights the proactive steps UK businesses are taking toward achieving net zero, from improving energy efficiency and cutting waste to adopting renewable energy and electrifying parts of their operations. Yet, despite this progress, many businesses still face financial hurdles that risk slowing momentum. According to a 2024 survey by BT, Small Business Britain, and Oxford Brookes Business School, nearly two-thirds of the country’s SMEs are struggling to cut their carbon emissions due to financial pressures. According to the survey, 41% of business owners admitted that monetary constraints were holding them back, while 64% said they needed more support to make meaningful changes. This is where finance, such as business loans, can play a pivotal role in helping SMEs scale their sustainability efforts. Whether it’s adopting green technology, expanding operations, or upgrading outdated infrastructure, business loans can make a real difference. For early-stage companies, the government-backed Start Up Loan Scheme offers fixed-rate loans of up to £25,000. And there’s the Growth Guarantee Scheme, which lets eligible businesses borrow up to £2 million, with the government backing part of the loan to reduce lender risk. With the right financial support, SMEs can tackle ambitious sustainability projects without hampering their cash flow, turning environmental goals into long-term business gains. If you’re ready to start — or scale up — your decarbonisation journey, here are some actionable ways to make a real impact: Run an energy audit Start by understanding where your business uses (and wastes) the most energy. Switch to a renewable energy supplier, explore on-site generation Changing to a green energy tariff can often be a simple, cost-neutral way to reduce emissions. For businesses with the space and resources, installing solar panels, for example, can provide longterm savings and energy independence, and may qualify for tax breaks or grants. Visit www.money.co.uk to find tailored business funding options in minutes from over 150+ trusted lenders, with no impact on your credit score. Changing to a green energy tariff can often be a simple, cost-neutral way to reduce emissions. Photo: Mike Bird / Pexels
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