With a growing focus on climate change, businesses worldwide are reducing their carbon footprint and working towards net-zero emissions.
One way to cut carbon emissions is to replace your vehicles and equipment with green alternatives. But this can be expensive, and not all businesses have the working capital to make these payments upfront – even with substantial tax benefits for eco-friendly purchases.
To overcome these obstacles, businesses of all sizes and sectors are taking out affordable, low-risk asset finance contracts.
With asset finance, you can acquire the equipment and machinery you need to reach net zero without spending years building up working capital. Join us as we take a look at how you can use asset finance to achieve your sustainability goals.
Why is net zero important?
Reaching net-zero emissions means the amount of greenhouse gases your business emits is balanced by the amount removed from the atmosphere.
But net zero isn’t just about fulfilling a moral obligation or complying with government legislation. It can also have several significant benefits for business growth.
That’s because adopting sustainability practices and aiming for net zero also lets you:
- Improve your brand reputation
- Save money on fuels
- Gain a competitive advantage
- Leverage valuable tax incentives
- Attract investment
- Protect against rising fuel and energy costs
- Avoid disruptions in the fuel supply chain
By taking out asset finance for green energy alternatives and energy-efficient equipment, you can develop a powerful brand image and support strong, long-term business growth.
How does asset finance for net zero work?
Asset finance is an affordable, low-risk way to generate capital and acquire the assets you need to reach net zero.
You partner with a lender who either leases you an asset or lends you the money to get it yourself. You then make predictable monthly repayments, often at a fixed rate of interest, for the duration of your contract.
This type of finance agreement also helps protect your business against bankruptcy. If you default on your loan, the lender will repossess either the asset in question or any other assets you offer as collateral. So even in the worst-case scenario, your business remains operational.
The best part is that if you use a broker like Kane Financial Services, you can get exclusive rates and terms that high street lenders can’t match. This makes it even easier to make repayments, and helps you reach net zero with minimal risk.
What eco-friendly assets can you get through asset finance?
Renewable energy sources
One of the most important resources for reaching net-zero emissions is renewable energy. As well as reducing your company’s carbon footprint, renewable energy sources can also benefit you with long-term savings.
Renewable energy options include:
- Solar panels: Installing solar panels lets you generate clean electricity using energy from the sun
- Wind turbines: While wind turbines have a higher upfront cost than solar panels, they’re a much more efficient renewable power source
- Combine heat and power (CHP): Any system that generates electricity also generates waste heat. CHP systems capture this waste heat and reuse it, improving energy efficiency
- Biomass and anaerobic digestion: These systems transform organic waste into renewable energy, allowing you to solve two problems at once
Energy-efficient equipment
Reaching net zero isn’t just about generating renewable energy. It’s also about making your energy usage more efficient and reducing waste.
Equipment that lets you dramatically reduce your energy consumption and emissions includes:
- LED lighting: These lights use up to 90% less electricity than traditional bulbs, and tend to last around 25 times longer. This reduces your energy use as well as the frequency of manufacture and replacement
- Boilers: Energy-efficient boilers consume less fuel and emit fewer pollutants
- Heating, ventilation and air conditioning (HVAC): Upgrading your HVAC system to an energy-efficient model lets you maintain comfortable indoor conditions while reducing your energy consumption and costs
- Voltage optimisation: This technology ensures your electrical equipment uses optimal voltage levels to minimise wasted energy
- Battery storage: Storing energy for later use cuts down on waste and supports efficient use of renewable energy sources
- Building Energy Maintenance Software (BEMS): These systems allow you to monitor and control energy use in real time, improving your energy efficiency and sustainability
Low-emission vehicles
Transportation significantly contributes to emissions, especially if you handle your own logistics. But electric cars and other alternative vehicles can cut your carbon footprint significantly.
You can reduce transportation emissions with:
- Electric vehicles (EVs): EVs in Europe produce around three times less CO2 compared to petrol vehicles
- EV charging points: By making EV charging points more accessible, you encourage employees and customers to adopt green alternatives
- Hybrid vehicles: While the lower mileage-per-charge of EVs might make them unsuitable for your transportation needs, plug-in hybrids help you cut carbon emissions while still offering high mileage
- Clean air zone (CAZ) and Low & Ultra-Low Emission Zone (ULEZ) compliant vehicles: Meeting CAZ and ULEZ regulations not only helps you reach net zero, but also lets you avoid non-compliance charges
Enhanced capital allowances for eco-friendly equipment
There are certain tax benefits of asset finance that can make your transition to net zero much more affordable.
Enhanced capital allowances (ECAs) are a government tax incentive that gives you a 100% first-year allowance for eco-friendly equipment. That means you can claim the full value of this equipment against your business taxes in the year of purchase, provided it’s new and unused.
By taking advantage of ECAs, you could get eco-friendly equipment essentially for free.
You can claim ECAs for:
- Electric cars and cars with zero CO2 emissions
- Plant and machinery for gas refueling stations, for example, storage tanks, pumps and refueling equipment for gas, biogas and hydrogen
- Zero-emission goods vehicles
- Equipment for EV charging points
- Plant and machinery for use in a special tax site in UK Freeports or Investment zones, if you’re a company
Reach net zero with Kane Financial Services
With more than 35 years’ experience as an independent asset finance broker, we help businesses throughout Northern Ireland and the UK get the funding they need to reach net zero.
We use our extensive network of lenders to match you with an asset finance provider that offers rates and terms suitable for your business needs. And even if you’re a start-up company or have poor credit, we can help you find a lender that’s prepared to support your business.
Apply for asset finance online today to see the options available to you, or get in touch with our expert team to find out more.