How Asset Finance Can Make Your Business More Sustainable
01st February 2022
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A recent UN study has shown highlighted the negative effect that humanity is having on our planet, and how urgent action is needed to slow down and reverse these effects, but what can a business do to help? How can they become more environmentally friendly?
After undoubtedly the most bizarre 18 months any of us have seen, businesses are in a delicate position. While many business owners will most likely want their business to become more sustainable and environmentally friendly, there will be lingering concerns over the Coronavirus pandemic and the effect it has had on their bottom line. So, what is the answer?
Sustainable asset finance could be one way to help.
Asset-based financing is a flexible approach to funding vital business equipment, machinery, computers, vehicles, and tools that can help your business grow, but it can also be used to make your business more sustainable, and here’s how.
Replacing old machinery
Your business may rely on several high-value machines such as CNC cutting machines, forklift trucks, or vertical access machines. If these machines/vehicles are old, it’s likely that they will not be particularly energy-efficient and could be costing your business money and increasing the damage to the environment. These machines are likely to be expensive and often difficult to replace outright, especially in the challenging times we now face in a post-covid world.
Here is where asset finance can help. With a small payment upfront and easy-to-manage payments on a regular basis, asset finance can help your business invest in new eco-friendly machinery or equipment and use them to your advantage, while making your business more sustainable in the process.
Investing in Green Energy
Switching to green energy is another great way to both save your business money and become more sustainable.
With asset finance, you can fund new green energy projects, such as
- Biomass equipment – Biomass is renewable organic material that comes from plants and animals. Matter is converted into energy through various processes, including direct combustion (burning), thermochemical conversion to produce solid, gaseous, and liquid fuels, chemical conversion to produce liquid fuels, and biological conversion to produce liquid and gaseous fuels.
- Solar Panels – A well-known, sustainable energy supply, solar panels can be used to power your business and in time even produce enough energy to sell back to the national grid.
- Wind turbines – Another well-known power source, wind turbines offer a great option for green energy, especially in areas that don’t enjoy too much sun and perhaps too much wind (such as in Durham, our home city!).
- Heat pumps – Air source heat pumps are a kind of renewable energy technology that takes the warmth from the air outside (even when it’s freezing) and use it to heat buildings, they use only about a third as much electricity as baseboard electric heaters and considerably less energy than gas or oil furnaces.
- Hydropower systems – Which is the process of turning falling or fast-running water into energy, there are four main types of hydropower, dams which are used to channel water and drive the turbines, pumped storage, this method requires the moving of water between reservoirs at different elevations and provides ‘on-demand electricity. Run of the river – typically used for smaller generation, where water flowing downstream is used as it passes, and tidal power, using the predictable movement of tides.
The flexibility of a green energy finance solution means that it can be adapted to meet your specific requirements and level of investment. Whether you’re funding just one asset, or you require funding for a complete green energy project on a much larger scale, asset finance can help.
Not every business can switch their energy source to a more environmentally friendly option and needs to look for other ways to become more sustainable.
One very effective way is to replace the lighting in your business with LED (light-emitting diode) versions. LEDs are a more sustainable option because they use much less energy than standard incandescent bulbs (around 75% less) because diode light is much more efficient, power-wise, than filament light. This means you can light your business premises for less money while becoming more environmentally friendly.
Using asset finance, you can spread the costs of the replacement of your existing light fittings with new LED versions.
Updating your business fleet
According to government figures, cars account for just over 18% of UK emissions, and a typical passenger vehicle emits about 4.6 metric tons of carbon dioxide per year, it is because of this that the government is establishing Clean Air Zones (CAZ) throughout the country to reduce emissions.
It’s estimated that there were 1.8 million company cars operating in the UK in 2019, so that’s a lot of cars that are potentially damaging the environment. If you want to update your fleet with a more efficient combustion engine or electric-powered vehicles, then asset finance could help.
Whether it’s cars, vans, trailers, or commercial HGV vehicles, finance deals are available to help your business replace existing vehicles, and if your business operates in one of the planned and designated Clean Air Zones, you may be eligible for grants and subsidiaries. All of which could help your business save money and become more sustainable.
How Anglo Scottish can help
When it comes to asset finance solutions, our team is here to offer you the support required to organise, set up and manage your finance agreement. We pride ourselves on understanding your business requirements, and our specialists have years of experience, enabling us to make the right recommendations and to help you get the most from your asset finance solution.
Want to find out more about your asset financing options? Get in touch today.
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