Ways to finance a green small business

Image by mohamed Hassan from Pixabay

By Noah Rue

Getting all of the ducks in a row to open is small business has never been easy. Neither has remaining open and becoming a successful small business. There are thousands of pitfalls that many aspiring business owners fall into, each of which can spell the end of a small business just like that.

Opening a small business that is designed to be green and sustainable can be even more difficult. Green businesses are desperately needed to help reduce the long-term environmental impact humans have on the planet — but start-up costs of going green tend to be substantially higher than not bothering. This can make it even more challenging to get the doors of your small business open in the first place.

Making sound financial decisions is pivotal in making it all work out. Finding and securing financing as well as going through the process of becoming a certified green business can make the difference.

Finding financing

Embracing sustainable practices can be a significant long-term benefit to your small business, but those adaptations can be expensive. Fortunately there are a number of financing options for green businesses that are trying to substantially limit their impact on the environment while still making a profit.

Probably the largest and most steady of financing options are state and federal governments. The U.S. government, for instance, offers a number of different loans for small businesses trying to be green. Opportunities include things like EPA grants that are designed to focus on green initiatives that improve air quality, pollution, or other environmental health issues. Another option might be Department of Energy grants and loans which are intended to address energy transition and other environmental challenges.

Outside of the government, there are plenty of other potential funding sources. These might include things like:

-Loans from environmental non-profits


-Traditional financing and small business loans


-Business credit lines

It might also be worth shaking things up in a way that will help go green and save money. For instance, it can be worth putting in the effort to have both a brick and mortar location as well as an online presence. Or, at least take steps to help your physical storefront compete with online shopping. This can also help you to extend your customer reach while also exploring means of sustainable shipment and eco-friendly packaging.

Green certification

Fortunately, once up and running, there are plenty of things you can do as a business leader to help make your business more and more green. It is worth reading about different green business regulations and incentives out there that can help bring in more funding to the businesses. If you are already completing green objectives for your company, why not earn a reward?

Earning a green certification from your local community, state, or even the federal government can be challenging. Continuing to take steps in the right direction will help though. Big things you can do include making your building more energy-efficient, focusing on less impactful supply chains and shipping strategies, and producing products that require less environmental harm. Small ways to make your business greener include things like using less paper, starting a recycling program, and encouraging employees to either work from home or find a cleaner means of commuting.

Unfortunately, at this point in time, being green typically also means being more expensive. Sustainable products are more expensive than traditional products for a couple of reasons, including:

-Sustainable products are typically more labor-intensive — and time is money.

-Some green products require green labels or certifications, which also take more effort on the producer’s part.

-Green and organic materials may require alternative treatments that are more difficult or expensive to manage.

-Green supply chains are still in the formation process, making them less efficient and more expensive.

To survive, it is essential for small businesses to pass these higher costs on to consumers. Fortunately, many consumers who are concerned about sustainability are also willing to pay higher prices for products they know are greener.

Getting a green small business up and running is no easy task. Luckily, there are a number of financing options available. Likewise, there are many ways to become a greener business from major updates to make the location more energy efficient to investing in greener supply chains. The sky’s the limit!


Noah Rue is a journalist and content writer, fascinated with the intersection between global health, personal wellness, and modern technology. When he isn’t searching out his next great writing opportunity, Noah likes to shut off his devices and head to the mountains to disconnect.

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