Green business loans: what UK banks ask for

A green business loan in the UK is a standard business loan with a reward attached for spending it on eligible green assets, such as solar panels, heat pumps, electric vehicles or energy-efficient buildings. The reward is usually a modest interest rate discount or a cashback payment. To get it, you mostly need to show what you are buying and that it qualifies, plus the normal affordability checks.

That is the short version. The longer version is that banks are increasingly asking all their business customers about energy use and emissions, whether or not you choose a green product. Having your figures ready makes both conversations easier.

What green loans do UK banks offer small businesses?

Each bank packages its offer differently, but most fall into two groups: discounted rates on loans for eligible green assets, and cashback on qualifying borrowing. Eligible assets typically include things like solar panels, heat pumps, electric vehicles and charging, insulation, LED lighting and energy-efficient buildings. Each bank publishes its own eligible list, minimum loan size and terms.

Further up the size scale, there are sustainability-linked loans, which follow the Loan Market Association principles. These tie your rate to targets, such as cutting emissions by a set percentage, and they require ongoing measurement and reporting. They are mostly used by mid-sized and larger companies.

Offers change often, and high street banks and specialist asset finance firms each run their own schemes. Treat this as a guide to what to expect, then check the current terms with your bank.

What evidence do banks ask for?

For an asset-based green loan, the evidence is mostly practical. Expect to provide:

1. Quotes or invoices for the asset, showing exactly what it is (make, model, specification).
2. Proof it is on the eligible list, such as an EPC certificate for a building or the vehicle type for an EV.
3. Evidence after purchase that the money went where you said. Check your loan terms for what happens to the green benefit if the money is not used for its agreed purpose.
4. The usual lending information: accounts, cash flow forecasts, existing borrowing.

Increasingly, relationship managers also ask a few wider questions. How much energy do you use? Do you know your carbon footprint? Do you have an environmental policy? These are rarely pass or fail for a small loan, but a clear answer makes you look well run, which is exactly what a lender wants to see.

Why your carbon footprint helps your application

You do not strictly need a carbon footprint for most green asset loans. It still makes the conversation easier in three ways.

First, it shows where your emissions actually come from, which points to the projects worth funding. For a business with vans, fuel is often the biggest line. For an office or shop, it is usually electricity and gas.

Second, it lets you put a number on the benefit. A business using 40,000 kWh of grid electricity a year has Scope 2 emissions of roughly 5.2 tonnes of CO2e at the 2026 UK government factor of about 0.13 kg per kWh. If solar panels cover a third of that, you can say the project saves around 1.7 tCO2e a year. These figures are approximate, but they are the kind of numbers lenders, and grant funders, like to see.

Third, it gives you a baseline. If you later move to a sustainability-linked product, or a large customer asks you to report progress, you already have a starting point to measure against.

How do I calculate the figures a bank wants?

The method banks and funders recognise is the GHG Protocol, using the UK government’s annual conversion factors. In simple terms, you multiply each activity (kWh of electricity, litres of diesel, miles driven) by the official factor for that activity.

You will need:

• Your electricity and gas use for a year, from bills or your supplier’s online account
• Fuel litres or mileage for each company vehicle
• A rough idea of business flights and train journeys

If you are missing something, estimates are fine as long as you say so. Our full guide to calculating your small business carbon footprint walks through each step.

How long will yours take?

Pick the option that sounds most like your business. You will see a realistic time, what to have nearby and a head start on the questions.

Which sounds most like you?

Sole trader working from homeConsultants, designers, developers, coaches10 to 15 minSole trader or freelancer in a co-working spaceA desk at a WeWork, Regus or local hub10 to 15 minSmall team in a co-working or serviced officeStartups and agencies with 2 to 25 people15 to 20 minSME with its own office and no vehiclesProfessional services, tech firms, studios20 to 30 minSME with vans, cars or regular staff travelTrades, field services, consultancies on the road30 to 45 minShop, cafe, workshop or product businessRetail, hospitality, makers and manufacturers30 to 45 min

Your estimate

About 30 to 45 minutes

Around 55 to 60 questions, most of them multiple choice

A bit more detail, and a much stronger report.

Vehicles are often the biggest part of a small firm's footprint, so this is where your report gets really useful. Fuel receipts or mileage logs both work, and estimates are fine too.

Handy to have nearby

• Fuel card statements, receipts or rough annual mileage per vehicle
• A recent energy bill for your office or yard
• Your headcount and any training records

Missing something? Estimates are fine, and you can come back to any answer later.

Vehicle emissions are the area grant funders and green lenders most want to see. Having them measured puts you ahead.

Start with this profile

First report free. No card needed.

Green loans, grants or both?

Loans and grants work well together. Many council and Growth Hub schemes cover a share of a project’s cost, leaving you to fund the rest, and a green loan can cover that balance. The two tend to ask for similar information: current energy use, current emissions, the expected saving and how you worked it out.

If you are weighing up both, see our guide to UK green business grants that ask for a carbon footprint. Grant rounds open and close through the year, so check your local council and Growth Hub regularly.

How ESG Now helps

The ESG Now questionnaire works out your Scope 1, 2 and 3 footprint from your energy, vehicles, travel, waste and water, using the official UK factors. Where you lack a figure, it offers an estimate and labels it clearly. You also get a private action plan with prioritised actions, which often doubles as a shortlist of projects worth financing.

A business with vans or regular staff travel usually finishes in 30 to 45 minutes, and most small businesses are done in under 30. Your first report is free, with no card needed. If green finance is your main reason for looking, our green finance page explains what the report covers for lenders.