More and more businesses are adding electric and hybrid vehicles to their fleets, a move spurred by a combination of tax benefits, environmental consciousness and legislation. However, the switch comes with a price tag. Alternative finance can help small firms meet the cost.

According to a new Renault-Nissan-Mitsubishi Alliance survey, almost a quarter of small businesses in the UK believe that vehicle fleets will be completely electric in a decade. Business efficiency and cost-saving are the primary factors that will be driving the change, with sustainability also contributing. The research found that environmental responsibility is considered of high importance by the vast majority of business owners who manage 50 vehicles or more.

One of the main reasons that the composition of business fleets is under the microscope is the growth of the e-commerce industry. According to the survey, almost 60% of business owners believe that they are well prepared for the increasing demand linked to e-commerce, while just over a fifth stated that they need to develop their infrastructure further.

The research provides an interesting insight into how and why electric vehicle use by businesses is changing. While the timeframe for a switch to all-electric fleets may well take longer than a decade, it is clear that the use of electric vehicles by businesses will only continue to grow.

So, how can small businesses manage the cost of this evolution? Alternative finance can help.

In the wake of prolonged caution from traditional lenders, the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are offering small business owners an alternative means of accessing capital for essential investment, such as in electric and hybrid vehicles for their fleets.

This is how a Sussex small business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new resources.

The current market uncertainty makes alternative finance even more important to SMEs. Small businesses are particularly vulnerable to the effects of Brexit and should it happen as scheduled, straightforward and quick access to finance on flexible, affordable terms will be vital to managing any interruptions to cash flow and safeguarding capital bases.

However long the switch to electric and hybrid vehicle-based fleets takes, it will happen. To manage this fleet evolution, small business owners need to be aware of all the funding options available to them, including alternative finance.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.