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Balance sheet and investors

You may be able to fund an investment through the cash available in your business or with the help of investors. Your accountant, solicitor or banking relationship manager might be able to connect you with potential investors locally or nationally.

Who to speak with

Accountants

Angel investors

Venture capital

Crowdfunding

Accountants will likely know of any tax relief or incentives available for action that moves your business towards net zero emissions. Your accountant will be familiar with your balance sheet and may have a corporate finance department that can source equity or debt investment for your business. In addition to this, some accounting services offer easily accessible, online resources to help companies develop strategies to improve their environmental impact.

Example

Digital accountancy firm Xero works alongside apps that can plug into its accounting software platform to provide additional analyses to clients. Carbon Analytics, for example, utilises data about the purchase of items like petrol and utilities to calculate the carbon and water use of organisations’ operations.

Angel investors are typically wealthy individuals with experience or interest relevant to your business. In the UK, they tend to invest between $25,000 and $750,000, although this range can vary depending on the location and industry of your company.

Venture capital funds are a common source of larger investments. As venture capital firms can be willing to take more risk, they also seek greater returns and therefore can be suitable for businesses with ambitious growth prospects.

Crowdfunding aims to grow the pool of potential investors in your business, usually by decreasing the minimum amount any individual needs to invest to acquire a share. Crowdcube and Kickstarter are examples and European examples can be found at CrowdSpace.com.

How to prepare for conversations
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What you could ask

Professional advice should be sought before formally approaching any potential source of investment. The price of the shares you are selling will need to be agreed between your existing shareholders, directors and the investors. To agree this price there will be a due diligence process, similar to seeking a large loan, and again it would be advisable to seek professional representation through this process.

Read about businesses who have successfully found financial support

Potential sources of financial support – summary table

Stakeholder

Motivation for providing financial support

Examples of what financial support might be available

Examples of who you could speak with to learn if support offered

Customers (buyers)

  • Climate commitments by companies that include reducing the emissions of their supply chain
  • Improve the resilience of their supply chain to new policies aimed to avert climate change or the negative impacts of climate change
  • Protect supply chain from increased costs associated with carbon, such as ‘dirty’ energy
  • Improved purchasing terms (eg, days receivable reduced so working capital improves for small business)
  • Access to preferential invoice finance (eg, borrow against outstanding purchase orders to access funds sooner)
  • Advice and mentoring
  • Procurement representative

Banks

  • Commitments by banks to support customers to reduce emissions
  • Reduce the risk and carbon footprint of bank lending
  • Strengthen relationships and generate business opportunitie
  • Working capital solutions, e.g. trade finance
  • Loans for investments that reduce emissions
  • Emission calculators and advice
  • Relationship manager
  • Sector specialist (eg, transport)

Grants and other forms of government support

  • Local, national and international objectives for action on climate change
  • Grants to encourage investment in emissions reduction
  • Discounted lending distributed by a development bank, such as KfW
  • Access to investors or other sources of funds dedicated to climate action
  • Accountant
  • Local council enterprise officer
  • Local municipality
  • Bank
  • NGOs offering financial support in your area

Balance sheet and investors

  • Lower operational expenditures
  • Improve the commercial positioning of the business (eg, including alignment with buyers’ climate-related procurement policies)
  • Investors’ climate objectives
  • Self-funded from balance sheet (cash, asset sales, etc.)
  • New shareholder investment (equity)
  • Accountant
  • Current shareholders
  • Prospective investors

Customers (buyers)

Motivation for providing financial support

  • Climate commitments by companies that include reducing the emissions of their supply chain
  • Improve the resilience of their supply chain to new policies aimed to avert climate change or the negative impacts of climate change
  • Protect supply chain from increased costs associated with carbon, such as ‘dirty’ energy

Examples of what financial support might be available

  • Improved purchasing terms (eg, days receivable reduced so working capital improves for small business)
  • Access to preferential invoice finance (eg, borrow against outstanding purchase orders to access funds sooner)
  • Advice and mentoring

Examples of who you could speak with to learn if support offered

  • Procurement representative

Banks

Motivation for providing financial support

  • Commitments by banks to support customers to reduce emissions
  • Reduce the risk and carbon footprint of bank lending
  • Strengthen relationships and generate business opportunitie

Examples of what financial support might be available

  • Working capital solutions, e.g. trade finance
  • Loans for investments that reduce emissions
  • Emission calculators and advice

Examples of who you could speak with to learn if support offered

  • Relationship manager
  • Sector specialist (eg, transport)

Grants and other government support

Motivation for providing financial support

  • Local, national and international objectives for action on climate change

Examples of what financial support might be available

  • Grants to encourage investment in emissions reduction
  • Discounted lending distributed by a development bank, such as KfW
  • Access to investors or other sources of funds dedicated to climate action

Examples of who you could speak with to learn if support offered

  • Accountant
  • Local council enterprise officer
  • Local municipality
  • Bank
  • NGOs offering financial support in your area

Balance sheet and existing or prospective investors

Motivation for providing financial support

  • Lower operational expenditures
  • Improve the commercial positioning of the business (eg, including alignment with buyers’ climate-related procurement policies)
  • Investors’ climate objectives

Examples of what financial support might be available

  • Self-funded from balance sheet (cash, asset sales, etc.)
  • New shareholder investment (equity)

Examples of who you could speak with to learn if support offered

  • Accountant
  • Current shareholders
  • Prospective investors