Green finance for entrepreneurs: current perspectives and conceptual model

Gaining finance is crucial for entrepreneurs. This paper reviews the green finance market and provides an overview of key sources of finance available. We identify the main sources used and the advantages and disadvantages of each for entrepreneurs. Background is provided on the international, European, and UK green finance markets so that entrepreneurs are familiarised with their target market for green finance. Academic papers on green finance such as Demirel et al. (2019) tend to focus on the problems faced by entrepreneurs in gaining finance highlighting lack of collateral, uncertainty, complexity, perceptions of higher risk, perceptions of lower scalability, and longer pay-back periods. Nevertheless, Nobel prize winning economist Jeffrey Sachs, and colleagues, (2019) remind us that green finance is important as climate change is the world’s greatest environmental threat and that If the current trajectory of global fossil-fuel use continues the planet’s temperature is likely to rise by 4-6 degrees Celsius above its pre-industrial level, be catastrophic for food production, human health, and biodiversity, and threaten communities’ survival. We, therefore, focus on the growing opportunities for obtaining green finance and provide positive examples of projects funded. The paper provides a model of green finance which assists the entrepreneur identify which sources of green finance to target.