As climate change poses continuing threats to the economy and environment, many businesses are in the pursuit of sustainability in their operations and decision-making. This is encouraging, because we all have to do our part to fight climate change. Add to that the increasing number of people who prefer to conduct business with those who retain their corporate responsibility in the environment.
One study found that 78% of consumers are more likely to purchase an environmentally friendly product. As a result, more businesses are aiming to generate a profit as well as reduce their overall environmental impact.
But whether you’re just starting up a green business or trying to expand it, you need funding to get a green idea off the ground. Read on to know how you can better secure funding as an eco-entrepreneur.
Build Linkages with Other Eco-Entrepreneurs
Like other types of businesses, building appropriate linkages with other eco-entrepreneurs can open new doors for you. By connecting to a community of green businesses, you’d be able to get referrals and learn how they become successful. However, also consider how you can add value to their challenges by sharing your own experiences.
Other eco-entrepreneurs that are not your competitors can introduce you to potential investors. So, try to get involved with groups that hold events for sustainable businesses. Your presence and visibility can raise your business profile, leading you to a number of funding opportunities.
Apply To an Eco-Accelerator Program
Another way to get funding is to apply to an accelerator program for growth-focused eco-entrepreneurs. The general role of accelerators is to support entrepreneurs through all stages of their business cycle. Typically, they will provide you with resources, such as mentorship, capital, and connections to investors to help you launch or boost your business.
Here are some accelerators that usually fund and support eco-friendly businesses:
- Echoing Green
- Startupbootcamp’s Sustainability Accelerator
- 100+ Accelerator
- Better Ventures
- GoodCompany Ventures
- Techstars Sustainability Accelerator
- Blue Startups
- Food Future Co.
- Praxis Accelerator Program
- Fashion for Good
Get A Federal Loan or Grant
The government has several grant and loan options specifically designed for green businesses. But make sure to do your research and check whether the funding is accessible in your location. It’s also best to think about how it will benefit your specific business needs and goals.
Below are some of your options if you’re considering getting a federal loan or grant:
- Department of Energy Grants and Loans: The Energy Department sponsors several grants, loans, and financing programs through their Loan Program Office (LPO). If your business deals with clean energy projects, you can find a funding opportunity through the Energy Department offices.
- Environmental Protection Agency (EPA) Grants: The EPA also awards grants and funding programs to green businesses to help achieve their environmental goals. But their qualification standards and grant policies can be rigorous and competitive. Be sure to check out their guidelines before you apply.
- National Science Foundation (NSF) Grants: If your business needs funds for research, education, or training projects, you can apply for a grant from NSF. It’s an independent federal agency that funds research and encourages proposals from a variety of small businesses.
Secure Business Loans
Business loans are another excellent choice, especially if your green business needs a quick infusion of capital. Unlike other funding options, the process of getting business loans is simple and fast. You can just secure loans online from alternative lenders, move forward with your green business projects, and make a profit reasonably soon.
Another good thing about business loans is lenders won’t ask a lot from you in return, as long as you’ll pay the loan back on time. When applying for a business loan, always keep in mind that you have to repay the fund on a predetermined period. Thus, make sure to shop around to get the best rates and terms.
Seek Out Investors
Besides consumers, more investors are also eager to work with businesses that are serious about sustainability. They are backing up green projects with reliable sources of funds as well as creative ideas. The drawback is, not all businesses qualify for investors. You have to convince them that your business is worth investing in.
Note that finding the right investor is crucial to receive the funding your business specifically needs. So, other than creating an attractive and realistic business plan, you should search for an investor that suits your company’s vision and values.
The whole process is often time-intensive and you might have to put your green initiatives on hold while you’re trying to close a deal. But with a great pitch and strong business model, you can draw one or even more investors to fund your entire green business transformation.
Find The Right Funding For Your Business
Although there’s a growing demand for green businesses, securing the right funding is critical for you to launch and scale your sustainable business ideas. Make time to do your research and consider your business’s financial needs, values and credentials. Once you settle the financial aspect of your business, you’ll have more time to focus on making it more sustainable environmentally.
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