What are sustainability loans & why businesses use them

Sustainability loans are business finance products used to fund projects that reduce environmental impact or improve resource efficiency. In the UK these commonly support solar PV, heat pumps, EV charging infrastructure, energy-efficiency works (lighting, insulation, HVAC), waste-reduction technologies and other investments offering measurable carbon or cost savings. Funding can help spread upfront costs and deliver faster payback than waiting to self-fund.

Businesses choose sustainability finance to lower energy bills, reach corporate net-zero targets, improve building ratings and comply with regulations such as clean air zones. For more detail on schemes and lenders who specialise in green projects, read our pillar overview on sustainability loans.

UK Government net zero guidance and resources from the Carbon Trust are useful references when preparing a business case.

Quick action: Ready to check your options? Start your Free Eligibility Check — it takes about 2 minutes and does not affect your credit score.

Typical projects funded by sustainability loans

Other funded activities include sustainable packaging lines, anaerobic digestion, energy management software and on-site battery storage. Projects that demonstrate measurable energy or carbon savings usually attract more competitive terms.

How sustainability loans work in the UK

Finance is typically structured to match the asset life and cashflow benefits. Common options include unsecured term loans, secured business loans, asset finance (where the equipment is collateral), hire purchase and leasing. Lenders assess the project’s expected savings, projected payback and the business’s ability to service the debt.

Loan sizes vary by lender and project complexity; in our panel many lenders consider requests from around £10,000 up to several million. Tenors can range from months (short equipment leases) to 10 years or more for large capital projects. Interest rates and fees depend on the lender’s assessment of risk, security offered and the business’s financials.

Note: All rates and terms are illustrative. Each lender sets their own criteria — your enquiry helps us match you to suitable partners who can discuss specific terms.

Sustainability loan eligibility checklist

Below are the common items lenders review when assessing a sustainability loan request.

Tip: Include measurable KPIs (kWh saved, kg CO2 reduced) in your enquiry to strengthen lender interest. If you need help preparing documents, our broker partners can advise once you submit an enquiry.

Fast Business Loans’ 4-step matching process

1. Complete a 2‑minute enquiry — tell us about your business, funding amount and project.
2. We shortlist experienced partners — lenders and brokers with sustainability expertise matched to your needs.
3. Receive a prompt introduction — expect contact by phone or email, often within 24–48 hours.
4. Compare offers and decide — you receive direct quotes from lenders/brokers and choose what suits you. We do not advise — we introduce.

Submitting an enquiry will not affect your credit score. Hard checks may be made by lenders only if you decide to proceed with an application.

Get Matched in Minutes — Start Your Free Enquiry

Finance options for sustainable projects

Unsecured sustainability loans

Use: smaller retrofits or working capital for fast projects. Pros: quick to arrange, no asset security. Cons: higher interest rates and usually lower amounts.

Secured loans & asset finance

Use: solar arrays, EV fleets, larger equipment. Pros: lower rates, longer tenors; security can be the asset or property. Cons: lender may take charge over the asset.

Equipment leasing & hire purchase

Use: spread cost of equipment while preserving capital. Pros: predictable payments, potential tax treatment benefits. Cons: you may not own the asset until final payment.

Invoice finance & cashflow support

Use: businesses delivering sustainability services that need to bridge payment cycles. Pros: unlocks working capital quickly. Cons: fees depend on debtor quality.

Blended finance & grants

Use: combining commercial loans with grants or incentives can improve project viability. Check available UK grant schemes and local authority funding to see if your project qualifies.

If you’re unsure which route is best, our enquiry puts you in touch with brokers who specialise in sustainable project finance and can outline options tailored to your business.

Calculating ROI on sustainability investments

Build a simple business case showing:

• Upfront cost (including installation)
• Annual energy or fuel savings (monetary)
• Maintenance savings or additional revenues
• Payback period = upfront cost ÷ annual net savings

Also consider tax incentives, depreciation, and non-financial benefits such as improved brand value or compliance. Lenders will typically review the payback period and reasonable assumptions about savings when deciding terms.

Tip: include an energy audit or supplier quote in your enquiry to speed up lender assessments.

Sector spotlight: who we help

We connect businesses across many sectors to sustainability finance specialists:

• Manufacturing — process heat and power improvements
• Hospitality & leisure — HVAC, kitchen efficiency, lighting
• Logistics & transport — EV fleets, depot chargers
• Agriculture — renewable energy and precision farming tech
• Retail & e-commerce — efficient warehouses, sustainable packaging
• Construction & developers — retrofit projects and EPC upgrades

Tell us about your sector — Free Eligibility Check

Case study snapshot (illustrative)

Background: Midlands-based manufacturer needed a solar roof and inverter upgrade to reduce energy costs.

Funding need: £120,000 for supply and installation; expected 6‑year payback.

Solution: Matched with an asset finance specialist; 7‑year term, fixed monthly payments. (Illustrative only.)

Outcome: Annual energy cost reduction of ~35%, projected CO2 savings, and improved business resilience against energy price increases.

Illustrative example — results vary by business and lender assessment.

Preparing for a successful sustainability loan application

Before you contact lenders, gather:

• Supplier quotes and project specification
• Recent filed accounts and management accounts
• Cashflow forecast showing debt servicing
• Energy audits, EPCs or accreditation where available

Providing clear, quantifiable savings and realistic timelines helps lenders respond faster and more positively. If you need help packaging the information, one of the brokers we introduce can advise.

Frequently asked questions

What projects qualify for sustainability loans?

Typical projects include renewable energy installations, energy-efficiency upgrades, EV charging, waste reduction and other investments with measurable environmental benefits.

How quickly can I get funding?

Timescales vary. After you submit an enquiry you may hear back from lenders or brokers within hours or days; full underwriting and drawdown depend on documentation and project complexity.

Do I need to provide security?

Some finance types require security (asset finance or secured loans). Unsecured options exist but may cost more.

Will checking eligibility affect my credit score?

No. Completing an enquiry via Fast Business Loans does not affect your credit score. Lenders may carry out credit checks if you proceed with an application.

Are there grants or incentives available alongside loans?

Yes — some projects may qualify for grants, tax reliefs or incentive schemes. Combining grants with commercial finance can improve the project economics; include grant details in your enquiry if applicable.

What happens after I submit the enquiry form?

We match your request to suitable lenders/brokers and introduce you. They will contact you directly to discuss next steps and may request documentation to provide a quote.

Ready to accelerate your sustainability projects?

Fast Business Loans makes it simple to connect with lenders and brokers who understand green investment. Our service is free, no obligation and designed to get you timely, relevant quotes so you can compare options.

Get Your Free Sustainability Loan Match — Start Your Enquiry

Submitting this enquiry does not commit you to finance and will not affect your credit score. We are an introducer that connects businesses with finance partners who provide the finance directly.