SMEs are displaying a heightened focus on finding finance to boost their sustainability, new research by Allica Bank has suggested.

This comes as a study found that 65% of commercial mortgage brokers and 76% of asset finance brokers said they have seen an increase in the number of “green loan” enquiries.

Allica’s quarterly broker survey indicated that the trend is being driven by SMEs prioritising the upgrade of inefficient machinery, with 48% of commercial mortgage brokers and 72% of asset finance brokers saying their clients sought finance to help fund these projects. Behind this came buying electric vehicles, 26% and 70%, respectively, followed by improving the green credentials of their existing premises, at 35% and 28% respectively.

Around a fifth of commercial mortgage brokers also said they’d seen a growing number of clients reach out to them for help specifically to move their business to a more energy-efficient property.

Allica stated that this focus on sustainability is partly to help combat rising costs, with 88% of asset finance brokers and 66% of commercial mortgage brokers saying they have impacted their SME customers’ 2022 business plans.

“While there are serious challenges ahead for business owners, this could be a catalyst for some significant jumps forward in the UK’s efforts to achieve net-zero,” Allica chief commercial officer, Nick Baker, commented. “The combination of a worsening climate crisis and soaring energy costs will make improving energy efficiency a no-brainer for many businesses.

“Whether it’s better insulating your premises, electrifying your fleet, upgrading machinery, or moving to new premises altogether, it can all help cut monthly outgoings in the long run.

“However, due to the significant upfront cost of many of these projects, brokers are going to play a pivotal role, as a growing number of clients seek the finance to fund them. Those brokers well-versed in how to make a strong funding application for green energy projects will be able to add significant value.”

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