Many small business owners face the same challenge: securing funding. Banks are hesitant, investors want rapid returns, and grants feel impossible to win. But what if there was a way to make your business more attractive to funders while also reducing costs and increasing profits?
That’s where sustainability comes in. More investors, banks, and grant providers are prioritizing businesses that reduce waste, use ethical labor, and focus on clean energy. In fact, businesses with strong sustainability practices are 40% more likely to secure funding than those without.
Why Sustainable Businesses Get More Funding
1. Grants Favor Green Businesses
Governments and private organizations are pouring money into sustainability. In 2023 alone, the U.S. Small Business Administration awarded over $4 billion in sustainability-focused grants (SBA).
Types of grants available:
- Energy Efficiency Grants (e.g., USDA’s REAP program for rural businesses)
- Waste Reduction Grants (e.g., EPA’s Small Business Innovation Research funding)
- Sustainable Packaging Grants (e.g., Closed Loop Partners funding for circular economy businesses)
2. Investors See Sustainability as Lower Risk
Sustainable businesses are more resilient. They cut costs by reducing energy use, avoid hefty fines from environmental violations, and attract customers who are willing to pay more for ethical products.
A 2023 study by BlackRock found that businesses with strong ESG (Environmental, Social, and Governance) practices had 28% higher profit margins and were less likely to default on loans.
3. Banks Offer Better Loan Terms for Green Companies
Many banks now provide lower interest rates for businesses that meet ESG standards. For example:
- Bank of America’s ESG Loan Program reduces interest rates for businesses with verified sustainability initiatives.
- Goldman Sachs’ Green Business Loan Program prioritizes funding for companies investing in clean energy or sustainable supply chains.
How to Position Your Business for Sustainable Funding
If you want to attract grants, investors, and better loan terms, here’s what you need to do:
Step 1: Incorporate Sustainability into Your Business Plan
Lenders and grant providers want to see a clear sustainability strategy. Highlight how your business reduces waste, cuts carbon emissions, or uses ethical sourcing.
✅ Example: A bakery switching to compostable packaging and sourcing local organic ingredients can qualify for food sustainability grants.
Step 2: Apply for Grants That Fit Your Industry
🔹 Manufacturing? Look into the Green Manufacturing Grant Program (DOE)
🔹 Retail? Apply for sustainable packaging grants (Closed Loop Partners)
🔹 Tech? Check out climate innovation funding (Breakthrough Energy)
Step 3: Measure and Report Your Impact
Investors and lenders want numbers. Use free tools like Carbon Trust’s footprint calculator to track emissions, or B Corp assessments to showcase social impact.
✅ Example: A clothing brand tracking its reduced water usage can appeal to investors focused on ethical fashion.
Take Action: Start Your Sustainable Business Transformation Today
- Research grants that align with your industry
- Track and report sustainability metrics
- Apply for green business loans
- Tell your sustainability story to attract investors
Looking for personalized grant recommendations? At VA By Ella, our services include research and admin task. These services include finding grants that fit your business needs, helping you prepare applications, and sending reminders when deadlines approach. Let us handle the research and admin work while you focus on growing your business!
Check out SBA’s Funding Directory or Grants.gov for the latest opportunities.
