A Guide for SMEs
For many small business owners, the world of funding opportunities can seem overwhelming.
It’s easy to assume that the only businesses that can access funds are those developing cutting-edge technologies like artificial intelligence or robotics.
However, the truth is that funding for sustainability, green economy, and innovation is available to all kinds of businesses, including those focused on everyday products and services.
Whether you own a local shop, a family-owned manufacturing business, or a service-based SME, there are plenty of funding opportunities for you to explore, even if you’re not in the technology sector.
In fact, you may already be more innovative than you think!
Let’s break down how SMEs can leverage these funding opportunities and how they can apply, even if they aren’t traditional “tech” startups.
Innovation is not only about technology
The first thing to understand is that innovation doesn’t always mean technology.
While there’s plenty of funding available for businesses working on AI, robotics, or other high-tech innovations, innovation can also mean finding new ways to run your business more sustainably, improve your operations, or better engage with customers.
For example, your business might be working on:
- Sustainable Practices: Switching to eco-friendly materials, reducing energy consumption, or cutting down on waste.
- Circular Economy Solutions: Creating new ways to reuse materials, repurpose packaging, or implement recycling systems. If you are a small business operating in the creative industries (where funding for green and innovation seems odd) funds are running to 2026 worth looking into.
- Social Impact: Focusing on local sourcing, fair trade practices, or community engagement.
These initiatives all represent innovation within the green economy or circular economy, and they’re just as eligible for funding as a high-tech startup developing a new app.
When looking for the right type of grant, it is important to make a distinction between funds and grants.
We emphasise this point because you have probably spent time looking into something called “SME grant” and it turns out to be a loan.
Although useful, a loan requires the SME owner to repay the money ‘won’ with interest (however low these may be).
On the other hand, a grant is a non-repayable fund allocated for specific projects, often tied to sustainable development, energy efficiency, or innovation.
For example, WRAP’s Resource Action Fund supports initiatives that reduce waste and improve resource efficiency, providing funding specifically for projects like recycling and food waste reduction.
Additionally, the Low Carbon Workspaces grant offers match-funding for energy efficiency projects to SMEs in certain regions across the UK.
Current Green and Innovation Funding Opportunities for SMEs
These clarifications serve as a starting point. Let’s move over the actual opportunities now available in the UK, in the EU and global funding toward the establishment of international partnerships.
Types of Funding Available for SMEs in the Green and Circular Economy
There are several funding programmes designed to support businesses that want to become more sustainable, adopt circular economy practices, or drive innovation in other ways.
Here are some of the key programs SMEs should explore:
A. Government Grants and Support
Many countries, including the UK and EU, offer government-backed grants to encourage businesses to innovate in sustainability, green technology, and circular economy practices.
Examples include:
- Innovate UK: Offers grants and loans to support innovation, including sustainability-focused projects like reducing waste or improving energy efficiency.
- Horizon Europe: A major EU funding program focused on research and innovation, with calls specifically for sustainable and green business initiatives.
- The EU LIFE Programme: Supports environmental and climate action projects, including projects that help businesses reduce their environmental footprint or transition to circular models.
B. Private Sector and Impact Investment
Impact investors are increasingly interested in supporting businesses that prioritise environmental sustainability and social impact.
Examples of funding options include:
- The Carbon Trust: Provides funding, advice, and resources to businesses that want to become more energy-efficient or sustainable.
- Impact Investment Funds: Many venture capital firms and angel investors focus on sustainable businesses. These funds are particularly interested in companies that reduce carbon emissions, conserve resources, and engage with local communities.
C. International Programmes
For SMEs looking to scale or collaborate internationally, there are also global funding opportunities:
- The Global Environment Facility (GEF): Provides funding for projects that address global environmental challenges, such as waste reduction, clean energy, or biodiversity.
- The Global Cleantech Innovation Programme (GCIP): Focuses on supporting startups and SMEs around the world in cleantech and green innovation.
How to Apply for Funding: A Step-by-Step Approach
Now that we’ve covered what types of funding are available, let’s break down how you can actually apply for these opportunities:
Step 1: Identify Relevant Funding Calls
The first step is identifying the funding programs that align with your business goals. You can start by exploring government websites, industry-specific portals, and funding databases:
- In the UK, check out Innovate UK and the UK Government’s Green Finance Institute.
- For EU-based funding, visit the EU Funding & Tenders Portal.
- Global programs like Horizon Europe and The Global Environment Facility offer international calls for proposals.
Step 2: Develop a Clear Proposal
To be successful in securing funding, it’s crucial to submit a compelling proposal. Focus on the following:
- Environmental and Social Impact: Describe how your project will benefit the environment, such as reducing waste, cutting emissions, or using more sustainable materials.
- Scalability: Even if you’re a small business, demonstrate how your project could have a broader impact—whether by reaching more customers or partnering with other companies to scale your efforts.
- Innovation: Highlight how your project or business model is new, unique, or better than existing solutions.
Step 3: Seek Guidance and Support
Many SMEs struggle with the complexities of the application process. That’s where support services come in. Organizations like Scottish Enterprise, Business Gateway, and Innovate UK can offer expert guidance on navigating the application process.
Step 4: Consider Partnerships
You might increase your chances of success by forming partnerships with other organizations or businesses. For example, partnering with an environmental consultancy or an industry player in a complementary field can strengthen your proposal and increase its impact.
How Northstar Can Help SMEs Navigate the Funding Landscape
For SMEs looking to maximize their chances of securing funding, Northstar offers tailored support in every step of the application process.
We understand that navigating the complex landscape of funding opportunities can be challenging, especially for businesses that don’t consider themselves “high-tech.”
Here’s how we can help:
- Identifying the Best Funding Calls: We’ll help you identify the most suitable funding programs for your business, whether you’re looking to scale sustainably, implement circular economy practices, or improve energy efficiency.
- Proposal Support: Our team will guide you through the process of writing a clear, compelling proposal. We’ll assist with creating a robust project plan that highlights your business’s sustainability efforts and its impact on the environment and community.
- Outreach and Networking Strategies: Securing funding often requires engaging with the right people. Northstar will help you develop outreach strategies to connect with stakeholders, potential partners, or investors, and build a network of like-minded businesses to enhance your proposal.
- Partnership Development: If you need to partner with other businesses or organizations to strengthen your application, we can help you find the right collaborators, whether within your industry or in complementary sectors.
- Comprehensive Support: From initial consultation to final proposal submission, Northstar provides end-to-end support to ensure you make the most of the funding opportunities available.
By working with Northstar, you can demystify the funding process and gain access to resources that can help your business innovate, grow, and make a positive impact on the environment.
Funding is Within Reach for Every SME
It’s a common misconception that funding opportunities are only for high-tech companies.
In fact, any SME with a commitment to sustainability and innovation can access these resources, whether they’re improving their operations, adopting circular economy practices, or developing new ways to engage with customers.
With the right guidance, even small, non-tech businesses can tap into funding and grants that support growth, innovation, and sustainability. By applying for these opportunities, you can unlock the potential to scale your business, improve your environmental impact, and contribute to a greener future.
Contact us today to learn how we can support you in identifying the right funding opportunities and writing a winning proposal that drives innovation and growth for your business.
