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Net Zero Business Loans
Do you need a loan to reduce the carbon footprint of your Small or Medium Size Enterprise and are based in the South West? If so, our Net Zero Business Loan could help you.
What are Net Zero Business Loans?
Net Zero Business Loans are flexible medium-term finance solutions for businesses that need capital upfront to help them develop and achieve their Net Zero ambitions. Importantly, Net Zero business loans do not require the borrower to offer tangible security and the Borrower can access funding for a range of purposes, and repayments are made within an agreed timeframe.
What is Net Zero and how does Net Zero affect my business?
As part of the Paris Agreement, Net Zero is a global objective set in place to help combat rising greenhouse gasses and carbon emissions which contribute to global warming. All SMEs will be required to decarbonise by 2050 – earlier if they can. This means that businesses around the world will need to consider their impact on the environment and develop strategies to support their transition to Net Zero.
According to statistics from the British Business Bank, consumers are already opting to choose businesses with a reduced carbon footprint, furthermore, consumers are willing to pay more for products and services from businesses that are actively working to improve their sustainability credentials.
The businesses that choose to delay starting their Net Zero journey could face widespread disruption if they cannot meet new regulations and risk losing market share to their competitors.
Our decisions are made by people, not computers, which means that we lend by looking at the bigger picture.
Our business managers provide support and guidance throughout the application process, and for the duration of the loan, to give our customers the best chance for success.
What are the Benefits of Adopting a Net Zero Strategy?
There are many positive benefits to transitioning to Net Zero and business owners should take a holistic view of how these initiatives can bring about positive change and long-lasting changes for their organisations. For example, adopting more sustainable business behaviours will enhance your reputation and may help you win more customers. Your long-term sustainability strategy could also help you attract investors.
There are also cost benefits to switching to renewable energy sources. It will be important that you fully research all of the options available to you. Aside from reputational and cost benefits, adapting to Net Zero will improve business resilience and enhance your competitive edge.
What can Net Zero Lending be used for?
There is a range of purposes that Net Zero business loans can be used for. For example, if your business relies on transport, could you switch to an electric vehicle? This could be particularly beneficial if your business requires travel within low-emission zones.
Switching to renewable energy sources to power your business could be a game-changer, because oftentimes, the return will outweigh the investment. If your business is reliant on machinery, you could invest in machinery that is more energy efficient than your current technology.
Whilst many of these initiatives may require a large initial investment, they may save you money in the long run.
Why should I choose SWIG Finance for a Net Zero Business Loan?
Access to finance is typically one of the biggest concerns for SMEs in the current business climate. Community Development Finance Institutions (CDFIs), like SWIG Finance, are non-profit lenders who help financially excluded SMEs to grow when the bank has said no.
Our business managers take the time to understand where your business is now and where it’s heading. Because our decisions are made by people, not computers, we are able to base our lending decisions on the bigger picture. It’s worth noting that, at SWIG Finance, we do not use automated credit scoring and can lend to projection-led businesses that demonstrate a strong growth trajectory. Furthermore, CDFIs, like SWIG, access their own capital from ethical sources and they report their social and environmental impacts back to our investors so that they can see that their money is being used for good.
How are Net Zero Business Loans repaid?
Repayment terms are usually up to 60 months and are agreed upon with the Borrower at the outset. This ensures the loan is repaid within a fixed timeframe allowing the borrower to plan and budget.
Early repayment of the loan is often available, but some lenders may charge a penalty.
What are Personal Guarantees and Debentures?
Personal Guarantees are provided by the Borrower so that in the instance that the business cannot repay the loan, the Borrower will become personally liable for the repayment of the loan.
Loans can be settled in full or by way of an arrangement to repay the loan over an agreed period of time. The Borrowers’ principal private residence is excluded from Personal Guarantees given to SWIG Finance. Debentures are a charge against floating assets of a limited company. A debenture gives the lender some rights over these assets and also the ability to step in and run the company if necessary. Debentures given to SWIG Finance will rank behind existing charge holders.
The debenture will be registered at Companies House.
What are the benefits of SWIG Finance Net Zero Business Loans?
- Offers a medium-term finance solution
- No tangible assets are required as security
- Borrow £25,001 up to £250,000
- Repayment terms up to 60 months
- We can lend by looking at the bigger picture – what is the business planning to do, who is behind it as well as what the business has done
- An assigned local business manager to support your loan application – they will spend time talking to the business owner to really understand what their plans are and how they hope to achieve them.
- Ongoing relationship support for the duration of the loan – our Business Managers are there to talk to if the business owner needs some help and guidance
We have Start Up Loans for businesses trading less than 3 years
Is my business eligible for a SWIG Finance Net Zero Business Loan?
SWIG Finance provides Net Zero Business Loans for South-West-based Limited Companies that have been trading for over two years. We can often lend to those businesses that can demonstrate how investing in green initiatives will help their businesses to grow.
What documents do we require for Net Zero Lending?
- Last 2 sets of full annual accounts, including detailed Profit & Loss Accounts
- Management accounts for the period since the most recent year-end to date
- Cashflow forecast for a minimum of 12 months, identifying the loan requirement and showing spending
- Agreement to Open Banking Report
- Business plan / executive summary overview
- Details of any agreed outputs e.g. number of jobs created or safeguarded
- ✓ You must be 18 or over.
- ✓ Limited companies only can apply.
- ✓ You must be a business with a clear plan for the purpose of the loan.
- ✓ The business must be able to demonstrate viability and growth potential.
- ✓ The business must be based in the South West of England.
- ✓ Applicant businesses will typically have been trading for more than 2 years.
How much can an SME borrow from SWIG Finance?
SME Loans from £25,001 up to £250,000 are available.
What are the interest rates and fees?
For a business loan of £25,001 to £250,000 repayable up to 5 years, the interest rate is 12% ABR.
There is a 5% arrangement fee at outset, which can be added to the loan. If any payments are missed or late there may be additional fees.
“We chose to work with SWIG Finance because, unlike other lenders, at SWIG you can talk to a person. Ultimately, SWIG Finance were able to support our business by looking at the bigger picture – something which other lenders are not willing to do.”
Customer Testimonial, SME Business Owner
What funding sources are available?
SWIG Finance offers Net Zero Business Loans to SMEs through its own ethically sourced capital and lends through a sustainable lending framework. SWIG Finance is also an accredited delivery partner for the British Business Banks Recovery Loans Scheme, which means we will lend where tangible security isn’t available
For businesses that have been trading for under three years, SWIG Finance also offers Start Up Loans through the government-backed Start Up Loans Scheme. Loans range from £500 up to £25,000. These are personal loans for business use.
How to apply for a Net Zero Business Loan?
To apply for a Net Zero Business Loan, you will need to complete our online application form.
Information we will need to assess your loan request:
- Last 2 sets of full annual accounts, including detailed Profit & Loss Accounts
- Management accounts for the period since the most recent year-end to date
- Cashflow forecast for a minimum of 12 months, identifying the loan requirement and showing spending
- Agreement to Open Banking
- Credit Report for all directors
- Business Plan
- Details of any agreed outputs e.g. number of jobs created or safeguarded
Apply now to take the next step in securing the funding your business needs.
Do you need to borrow less than £25k?
We have Start Up Loans available for businesses that have been trading for less than 3 years.
Apply for a business loan now
Please complete the below enquiry form and a member of the team will be in touch.
Funding Boost for The Boys Who Sew
Case Study, SME
Gloucestershire-based curtain makers, The Boys Who Sew, is the latest business to be supported by SWIG Finance. The £36k loan, which was backed by the British Business Bank’s Recovery Loan Scheme (RLS), will be used to fit-out the new premises and invest in green technology, such as the installation of solar panels and an electric vehicle, in support of their Net Zero journey.