Low carbon SME exporting hindered by lack of funding

Small businesses in the UK are at the heart of a low carbon boom, but new analysis suggests they are being held short of their potential due to a lack of available funding.


The Carbon Trust carried out the report, after it was commissioned by Shell, looking at new growth potential and opportunities in the market place.


It suggested that the UK’s low carbon SMEs are twice as likely to export when compared to small businesses in other sectors and that 67% are already selling to emerging markets.


As a result, this level of exporting is expected to play a leading role in meeting the government’s export target of £1 trillion by 2020.


A focus on key emerging markets – Mexico, the UAE, South Africa and Turkey – is also expected to drive exports.


Energy secretary Ed Davey has already placed a focus on low carbon SMEs, describing them as the “engine room” of the recovery process.


A number of climate change and export targets focus on building a new, more environmentally friendly economy but the report suggests a lack of funding could be hindering the process.


Nearly one in four low carbon SMEs suggested that raising capital was an issue – a concerning fact given the reliance of money in order to implement such projects.


In some cases, a lack of finance can place incredible pressure on company finances, leading to redundancies, changes in management and even business restructuring should the issues get out of hand.


Acting early can help to safeguard the future of such companies, but they will also need the necessary guarantees that such funding could be available in the future.


More than 180 low carbon SMEs were considered in the report, which concluded that the UK could triple its export of low carbon goods from £12 billion currently to £30 billion by 2020.


However, the report also suggested that was unlikely without the necessary support and suggested that the government would need to step in, while SMEs would have to consider their export options to a greater extent.


By Phil Smith


If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1144.

View all Business Insights