Best Business Loans

Can I fund sustainability projects like solar, biomass or irrigation efficiency?

Short answer

Yes — many UK businesses fund sustainability upgrades such as solar PV, biomass heating, battery storage, LED lighting, EV infrastructure, and irrigation efficiency using commercial finance. The most common routes include asset finance, hire purchase, equipment leasing, green business loans, and Power Purchase Agreements (PPAs). Best Business Loans does not lend or give advice, but we help you find suitable finance providers and brokers who are active in your sector.

Updated October 2025

What kinds of sustainability projects can be financed?

Typical eligible projects include rooftop or ground-mount solar PV, biomass boilers and CHP, anaerobic digestion, high-efficiency motors and drives, building energy management systems, heat pumps, and insulation. In agriculture, efficient irrigation pumps, variable speed drives, telemetry and control, reservoir lining, and drip or micro-irrigation systems are commonly funded. Lenders usually prefer proven technologies, named suppliers, and clear savings cases supported by quotes or energy audits.

What finance products are commonly used?

Asset finance, hire purchase, and equipment leasing for hardware such as panels, boilers, pumps, and controls.
Business term loans and sustainability-linked loans for broader capex or decarbonisation programmes.
PPAs and energy-as-a-service where a third party funds and operates your system, and you pay for the energy.
VAT and short-term bridging facilities to manage the upfront VAT or staged payments.

Important

All finance is subject to status, provider criteria and affordability. Rates, terms, and eligibility vary by lender and project type. Information on this page is for UK businesses only and is not financial advice.

Funding options for solar, biomass and irrigation projects

There is no single “best” route — the right option depends on your cash flow, ownership preferences, and tax position. Asset finance keeps repayments aligned to the life of the equipment, often with the asset as primary security. Term loans can fund multi-asset upgrades that go beyond equipment and installation.

PPAs avoid capex, making sense if you want price certainty and outsourced performance, though you won’t own the asset during the contract. For seasonal operations or staged projects, flexible drawdown and VAT facilities can help manage cash timing. Some providers offer “green” terms where repayments align with projected energy savings.

Option	Pros	Considerations
Asset finance / Hire purchase	Own the asset at end; fixed terms; asset-backed	Deposit may apply; maintenance is your responsibility
Equipment lease	Lower upfront cost; potential off-balance sheet treatment	No ownership unless you exercise options; contract terms matter
Term loan	Funds full projects including balance-of-plant and works	May require additional security or PGs
PPA / Energy-as-a-Service	No capex; performance risk transferred	Long-term commitment; price per kWh agreed
VAT / Bridge finance	Solves upfront VAT and staged payments	Short term; additional cost layer

Which projects and sizes fit which route?

Rooftop solar between 50 kWp and 1 MWp is commonly funded via asset finance, HP or PPA. Biomass or AD often involve higher capex and more due diligence, so blended funding or specialist lenders may be suitable.

For irrigation upgrades, asset finance works well for pumps, variable speed drives, smart controllers, and pipework. Larger farm projects can be combined with other capex in a single facility if needed.

Eligibility, documents and what lenders look for

Lenders assess your trading history, profitability or cash flow, project robustness, and the credibility of your supplier. They will want to see how the savings or new revenues cover repayments with headroom. For energy projects, an energy audit, EPC data or supplier-calculated yield and savings report is very helpful.

Common eligibility points include 2+ years trading, a UK-registered limited company or LLP, and clean credit with manageable existing commitments. If the asset has strong resale value and warranties, you may see more flexible terms.

Typical documents to prepare

Last two years’ filed accounts and recent management accounts.
Three to six months’ business bank statements.
Detailed supplier quote, SOW, expected yield or savings model, and warranties.
Any planning permissions, DNO/grid approvals (for solar/wind/CHP), and structural or roof surveys where relevant.
Insurance details and O&M plan; for biomass/AD, feedstock supply evidence and compliance certifications.

Sector nuances

Manufacturers, logistics, and cold-chain operators often justify projects based on predictable energy demand and high electricity costs. Hospitality and leisure commonly fund heat pumps, LED, and controls to reduce operating costs and carbon footprint.

Farmers can fund irrigation pumps, variable rate controls, and solar for on-site demand or machinery charging. For more sector-specific guidance, see our page on agriculture business finance and funding.

How Best Business Loans helps

Complete a Quick Quote and our AI-driven matching suggests lenders or brokers who understand your project type and sector. We introduce you to providers; you compare options and decide what works best. It’s quick, secure and without obligation.

Costs, incentives and return on investment

A typical commercial solar project might deliver 10–25% bill savings depending on size, roof orientation, self-consumption, and energy tariffs. Biomass and AD economics depend on fuel costs, heat load profile, and reliability. Irrigation efficiency can cut pumping energy costs by 20–50% with the right drives, pipework and scheduling.

Finance costs depend on term, asset class, credit profile, and security. Many energy assets are funded over 3–7 years, aligning repayments with savings to remain cashflow-positive where possible.

Tax treatment and allowances

Annual Investment Allowance (AIA) provides 100% first-year relief on qualifying plant and machinery up to a £1m cap.
Full expensing is available for companies on most new main rate plant and machinery, outside excluded assets.
Some energy assets sit in the special rate pool; check whether AIA or a first-year allowance applies to your scenario.

Tax treatment depends on your circumstances and may change. Consult your accountant for tailored advice.

Grants and schemes

Periodic local or sector grants exist for energy efficiency, heat decarbonisation, and farm productivity.
Industrial Energy Transformation Fund and regional decarbonisation programmes open in competitive rounds.
Smart Export Guarantee provides payments for exported electricity, though it is not a grant and rates vary by supplier.

Grants usually require match funding and proof of additionality. Many businesses combine grants with asset finance or a term loan to close the funding gap.

Example project snapshots

Rooftop solar 250 kWp on a factory, funded via HP over 5 years, aims for net savings versus day-one energy spend. A drip irrigation upgrade uses asset finance over 4 years with energy savings supporting repayments. A hospitality group funds LED and controls across multiple sites using a single multi-asset facility.

Step-by-step — how to fund your project quickly

Start with a clear scope, supplier quote, and savings model based on your usage and tariffs. Decide whether you prefer to own the asset or pay per kWh under a PPA. If you need to manage VAT or staged payments, note this in your enquiry.

Submit a Quick Quote with your company details, project purpose and estimated cost. Our AI matches you with suitable providers or brokers who can discuss terms, documents and timelines.

Funding timeline at a glance

Day 1–3: Quick Quote submitted; initial indicative terms and document request issued.
Week 1–2: Credit review; technical and commercial checks; final offer subject to conditions.
Week 2–4: Agreements signed; supplier paid; installation scheduled. Complex projects can take longer.

Practical tips to speed approval

Provide complete financials, supplier quotes, and any grid/planning confirmations early.
Choose reputable installers with relevant accreditations, performance guarantees, and O&M plans.
Show conservative savings assumptions and stress-test against energy price swings and seasonality.

Managing risk and performance

Seek long-term warranties and production guarantees from your supplier where available. Consider O&M contracts and remote monitoring to protect uptime. For biomass and AD, document feedstock contracts and compliance to reassure lenders.

Compliance, pitfalls and getting matched with providers

Avoid assuming savings equal repayments without contingencies. Check roof condition, structural load, and DNO constraints before committing to solar. For irrigation upgrades, consider duty cycles, head pressure, and scheduling to validate savings claims.

Make sure contracts clearly set out delivery milestones, performance thresholds, and responsibilities. Confirm whether you need additional insurance endorsements and who maintains the asset. Understand end-of-term options for leases and PPAs to avoid surprises.

Clear, fair and not misleading

All finance examples are illustrative and not offers. Any approval, rate or term is set by the lender or broker you choose and depends on your status, affordability and project details.

Best Business Loans is an independent introducer. We do not provide finance or advice, and content here is for information only.

Ready to explore funding?

Answer a few questions via our Quick Quote form and we will connect you with suitable finance providers or brokers. You can compare indicative options, ask questions, and decide your next step with no obligation. If you operate in energy-intensive sectors or agriculture, a short discovery call can accelerate matching and terms.

FAQs

Can I finance 100% of the project cost?

Some lenders will consider up to 100% of equipment and installation costs, subject to status and asset type. Deposits of 5–20% are also common, particularly for bespoke systems. VAT-only facilities may be available to bridge VAT until reclaimed.

How long can I finance solar, biomass or irrigation assets?

Typical terms range from 3 to 7 years, aligned to asset life and savings. Larger energy projects may justify longer terms from specialist providers. PPAs for solar commonly run 10–25 years with no capex.

Do I need security or a personal guarantee?

Asset-backed facilities often take security over the equipment. Depending on credit profile, some providers may also request a personal guarantee or debenture. Security requirements vary and will be explained by the provider.

What evidence of savings do lenders require?

Expect to provide a supplier quote, performance model, and a simple cash-flow showing repayments versus expected savings. Energy bills and usage data strengthen the case. Independent energy audits are helpful for multi-measure upgrades.

Are grants available, and can I combine them with finance?

Yes, some grants exist regionally or by sector, often on a competitive basis. Many businesses combine grants with asset finance or loans to meet match funding. Providers usually require grant award evidence before completion.

Can I include battery storage or EV chargers?

Yes — batteries and EV infrastructure can be funded alongside solar or as standalone assets. Lenders will assess utilisation assumptions and the site’s electrical capacity. A combined proposal can simplify approvals.

Will a lender fund my project if my site lease is short?

Lenders prefer lease terms that comfortably exceed the finance term. You may need a deed of consent or landlord letter for rooftop solar. Early clarity on tenure helps avoid delays.

Can farms fund reservoirs and irrigation efficiency?

Yes — many agricultural businesses fund pumps, variable speed drives, smart controls and efficiency upgrades. Reservoir works may be fundable depending on scope and security. Specialist providers understand seasonal cash flows and can structure terms accordingly.

Next step

Tell us your project purpose, budget, and timing. We’ll introduce you to lenders or brokers who are currently active in your sector.

Compliance and transparency notes

Best Business Loans is an independent introducer using AI-driven matching to connect UK businesses with suitable lenders or brokers. We do not offer loans directly, provide financial advice, or guarantee approval or rates. Any finance is subject to status, affordability, terms and conditions, and provider criteria; fees and charges may apply.

This content is designed to be clear, fair and not misleading and is intended for UK business customers only. Please obtain professional advice regarding tax, accounting and legal implications before committing to finance.

Take the next step

Ready to explore finance for solar, biomass or irrigation efficiency? Complete your Quick Quote now for a fast, no-obligation eligibility check and introductions to suitable providers.