Allica Bank has launched a new £10m dedicated fund to support SMEs with the purchase of electric vehicles, while also offering reduced rates on EVs.

Allica’s new fund is part of a wider initiative to help businesses reduce their carbon footprint and achieve sustainability targets

The new fund has been introduced following Allica’s latest survey of its asset finance brokers, which saw more than half (54%) of respondents say the main reason for their clients seeking sustainability-based finance was to purchase electric vehicles.

Targeted at both brokers and direct fleet customers, it’s part of a wider initiative to help businesses reduce their carbon footprint and achieve sustainability targets.

The challenger bank for SMEs, which launched in 2020, has also discounted rates to fund electric vehicles. It’s offering a 50-basis point (bps) reduction on its standard hard asset pricing, available for a limited time through to 31 December 2023.

Brandon Hall, head of sales – asset finance at Allica Bank

Brandon Hall, head of sales – asset finance at Allica Bank, said forward-thinking banks should place added emphasis on making sustainability targets an easier task to reach.

“Our latest survey of the broker community highlighted the growing demand from UK businesses looking for funding support to help improve sustainability, with making the switch to EVs top of the agenda.

“We hope that the new fund and rate reduction on electric vehicles will give brokers and their clients more opportunities to do that, along with the support of our award-winning business development team.”