Following the announcement of the group’s ambition to provide £100bn of Climate and Sustainable Funding and Financing to customers by the end of 2025, green loans and green asset finance are due to be open for applications from 18 February 2022.

Together, these propositions aim to help qualifying SMEs finance the business assets to support their sustainability ambitions, such as solar panels, electric vehicles, or heat pumps on commercial buildings that fall within the eligible list developed by the bank on an ongoing basis.

Customers do not need to be existing customers to apply, and the green loan proposition will be available through Royal Bank of Scotland, whilst the Green Asset Finance will be available through the Lombard brand.

Green Loans are designed to open up opportunities for sustainable growth options for qualifying SMEs and reflect the societal benefit of delivering climate action. To apply, qualifying SMEs will work directly with a Royal Bank or Lombard Relationship Manager to discuss their needs and check their eligibility.

Royal Bank of Scotland has also committed an investment of £1 million for SMEs across the next four years, in collaboration with the Edinburgh Climate Change Institute (ECCI). The ECCI is a University of Edinburgh programme and is Scotland’s leading low-carbon hub, utilising expertise and data to deliver real-world impact towards achieving Scotland’s sustainability and Net Zero ambitions.

The announcement also follows the publication of the bank’s ‘A Springboard to Sustainable Recovery report’[1] last October, which found that the UK’s six million SMEs can achieve 50% of the UK’s Net Zero decarbonisation goals worth an estimated £160 billion revenue opportunity. However, the report found that less than 10% of SMEs currently see climate action as a source of future growth, and that SMEs lack access to support through funding, knowledge and training.

The new propositions will be open to applications from qualifying SMEs who want to acquire assets that fall within the eligible list developed by the bank from time to time, relating to:

• Clean buildings: retrofits for buildings and low carbon heating measures
• Clean energy: renewable energy generation and energy storage systems
• Clean transport: electric vehicles
• Agriculture: renewable technology, crops, livestock, forest respiration and conservation, marine and low emission management

Lombard, as part of NatWest Group, is a specialist provider of asset finance across multiple business sectors and has been financing sustainability assets for many years. Its new Green Asset Finance proposition has no arrangement fee and aims to increase choices available to UK businesses by supporting their investment in sustainability with a wider range of financing options.

Asset finance provides businesses with an efficient way to finance a wide range of business assets, including assets that customers use to make their businesses more sustainable and electric vehicles. Asset finance provides businesses with a way to spread the costs of an asset over the period they will use it.

Lombard Vehicle Solutions, a Contract Hire solution provided through ALD Automotive, also enables customers to flexibly lease new electric and hybrid vehicles with the additional services they need to meet their needs.

Judith Cruickshank, regional managing director Scotland, NatWest Group, said: “Climate change is one of the biggest global challenges we face today, and Scottish SMEs have a critical role to play in helping the UK realise its green ambition. The reality is that while SMEs want to help by reducing emissions, they face many barriers doing so such as (limited) access to information, funding and training.

“We’re working to remove these barriers with concrete actions - providing incentives, such as loans and asset financing that aim to support sustainability ambitions, and aim to benefit businesses whether they bank with us or not.

“Today we’re announcing our ambition to stand by Scottish small businesses to help them reduce emissions and explore the opportunities that a move towards a green economy brings for us all. We cannot underestimate the power of small changes to make a big impact.”