Aug 30th, 2023
Green Finance Options for your Business
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It’s safe to say we’re all doing our best to move towards a greener, more sustainable future.
Whether it’s making small changes at home, or making conscious decisions with our purchases, there are always ways to take steps in the right direction.
And it’s no different with your business’ finance.
You may be thinking “What? How can finance be GREEN?”
Well, you’d be surprised, because when you think about it, money always ends up somewhere – and some companies are far LESS sustainable than others. That being said, there are some great options to put your money where your mouth is from a business perspective, and do some good for the world whilst managing your finances, including taking out new business loans.
At its core, the idea of sustainable finance is centred around making a positive impact on the world from a sustainability or environmental perspective.
So, what options do you have when it comes to sustainable finance? Let’s take a look…
1. Green Banking and Finance
This is all about understanding where your repayments go from an investment perspective.
When you think about it, for a home loan, or any other common loan, where does your money actually go?
Who knows? Traditionally, it just goes to your lender and you don’t hear anything more. Out of sight, out of mind.
The thing is, with Green Finance, you can be sure that the money your lenders are receiving for your loan is being directed towards making headway from a sustainable perspective. It may be that a sustainable company , invested in recycling or green production, or even a renewable energy project.
This is made possible by the world’s growing number of green projects. When it comes to determining whether a project or company is investing ‘green’ or not – it’s not just about the lender saying a simple yes or no. There are some stringent eligibility criteria set in place to ensure that your green loan is actually sustainably minded. That being said, some lenders are great at ‘greenwashing’, which is the idea of making stakeholders and prospective debtors (for example, YOU) think that their actions are a lot more positive for the environment than meets the eye.
Popular methods of greenwashing include using vague terms like “environmentally friendly”, “natural” or “ethical”, without providing any meaningful or concrete context – and it’s something we see a lot of when looking at the PR and Marketing of large companies. Evidence, therefore, is the key. Understanding what companies your prospective lenders really invest in will give you a great understanding of their relative ‘greenness’. Looking at lenders’ Product Disclosure Statements (PDS), as well as the regulatory ARPA website are great ways to help determine this.
At Rostron Finance, we work with a number of Green Finance lenders, so reach out HERE, and we’ll find the best option for you and your business.
These types of loans can be used specifically if you want to make a purchase of something that is directly sustainable in nature.
When growing your business, Green Loans can be great options, as lenders provide you with a better rate for contributing positively to the world. At the end of the day, it’s really a win-win, because the lender looks good, as it’s making indirect contributions to sustainable, small-scale investment, and you have a better deal to purchase necessary, sustainable necessities for your business.
Green Loans can be taken out for purchases such as:
- Electric Cars
- Solar Panels
- Water Tanks
- Double Glazed Windows
- Grey Water Treatment
The great thing here is these loans exist for both personal AND business purposes, meaning if you need to take a loan to buy water tanks for your home, this is possible too.
The concept of Green Finance is a relatively new concept – however, it is evidently very broad and beneficial for growing businesses.
Would you like to chat more about implementing a sustainable finance option into your business? Not sure where to start? Give Rostron Finance a call on 1300 70 70 39 – we’d love to help!
