Cleantech Industries

Why is financing Cleantech such a tricky subject?

Customers are used to being able to access new equipment under leasing arrangements. It is a model that has worked well in traditional markets for many years, providing benefits to manufacturers, customers and the finance industry alike.

As a manufacturer, your funding problems may not have stopped once you have raised the capital to bring the product to market. To convince a prospect to place an order is likely to require some form of bespoke finance facility, particularly for a product that has a higher initial cost and longer term ‘environmental’ payback. When it comes to cleantech products, the asset finance community is not proving to be so keen in providing the funding support for the sales process.

Traditional asset finance companies base their lending decisions on knowledge and experience of the equipment they are lending against. They seek to cover their risks through what they know about the asset;  particularly its expected economic working life and how much they can look to recover should a deal go wrong. Unfortunately the nature of new technologies means that quite often these issues are uncertain.

Does this sound familiar? If so, we believe we can help you.

The cleantech market

Cleantech refers primarily to new technologies, which through their use and implementation benefit the environment by reducing the planet’s dependency upon fossil fuels, thus effecting a reduction in CO2 emissions and delivering significant cost savings for the end-user.

When we talk about a cleantech asset we refer to equipment that either:

  • Reduces carbon footprint e.g. electric or hybrid vehicle technologies
  • Produces renewable energy e.g. solar PV and hydrogen fuel cells
  • Reduces a user’s energy requirements e.g. voltage optimisers and LED lighting
  • Creates energy from waste e.g. anaerobic digestion systems