Sustainability business loans: Can landlords or tenants use UK business loans to fund EPC / MEES upgrades?

Short answer: Yes — often, but it depends on who owns the property, the lease terms, the scale of works and the type of finance required. Landlords commonly use commercial or sustainability business loans for whole‑building EPC/MEES works; tenants can use business finance for fit‑outs or tenant improvements where the lease allows and landlord consent is given. This guide explains when borrowing is possible, the typical loan products, practical checklists, costs, legal points and how UK Business Loans can match you to lenders and brokers for projects from around £10,000 upwards. Start with a Free Eligibility Check if you’re ready to compare options: Get Quote Now.

Quick summary — who this is for

This page is for commercial landlords, tenants and property managers exploring financing routes to meet EPC requirements and avoid MEES-related restrictions. In many cases business finance can be used to fund energy efficiency measures — from LED lighting and insulation to HVAC upgrades, heat pumps and solar PV — but eligibility, security and lender appetite depend on the ownership structure (company vs personal), lease wording and project scale. UK Business Loans does not lend directly; we match businesses with lenders and brokers experienced in property retrofit and sustainability finance. Complete a Free Eligibility Check to see which lenders may be able to help: Free Eligibility Check.

What are EPC and MEES?

An Energy Performance Certificate (EPC) rates a building’s energy efficiency on a scale from A (most efficient) to G (least). MEES (Minimum Energy Efficiency Standards) sets the minimum acceptable EPC rating for commercial properties — currently commonly E for lettings, but check the latest GOV.UK guidance for updates and speak to legal advisers for specifics. MEES aims to prevent very inefficient buildings being brought to market or retained without improvements.

Who is responsible: landlords vs tenants?

Responsibility is usually determined by the lease:

• Landlords are typically responsible for major building fabric upgrades and whole‑building works required to meet MEES. Capital works that increase asset value are often procured by landlords.
• Tenants commonly fund fit‑outs, tenant improvements and installed equipment within demised premises — but leases may require reinstatement at lease end or specify limits on alterations.
• Split incentive: the classic problem is that landlords pay for capital works while tenants benefit from lower energy bills. Green leases and shared‑cost clauses (or service charge arrangements) are common solutions to share cost and benefit.

Always check the lease for clauses on improvements, consent to alter, service charges and repair obligations. If a retrofit delivers wider building compliance benefits, parties often negotiate a cost‑sharing agreement.

Need tailored advice on responsibility and funding options? Get a personalised match to lenders and brokers with retrofit experience: Get Quote Now.

Loan and finance options that can fund EPC/MEES upgrades

Several finance products are commonly used for commercial retrofit and MEES works. Choice depends on scale, security available and whether the borrower is the landlord’s company or the tenant’s trading business.

• Commercial mortgage top‑up / remortgage — suitable for landlords funding large, whole‑building upgrades; typically secured on the property and available for larger sums.
• Green retrofit / sustainability loans — specialist products for energy efficiency projects; may be secured or unsecured and designed specifically for retrofit measures.
• Asset & equipment finance — for HVAC, boilers, heat pumps, solar PV and batteries; often secured on the equipment itself, useful for mid‑range budgets.
• Energy Service Company (ESCO) / PPA — third‑party funds installation (e.g., solar) and you repay from guaranteed energy savings or a power purchase agreement; lowers upfront cost.
• Bridging loans — short‑term funding while longer, cheaper finance is arranged; higher cost but fast.
• Business loans / tenant fit‑out loans — tenants (trading limited companies) can borrow to pay for permitted improvements, typically unsecured or asset‑backed depending on size and credit profile.
• Grants & incentives — local authority schemes, Salix or other public funds can reduce capital required. Grants are complementary, not always guaranteed.

Typical borrowing sizes and security:

• Commercial mortgages: larger amounts (often £100k+), secured on property.
• Green retrofit loans: variable from ~£10k upwards, security depends on lender.
• Asset finance: tied to equipment value, often mid‑range.

Can landlords use business loans via UK Business Loans?

Yes. Landlords who operate through trading companies or special purpose vehicles (SPVs) can access commercial and sustainability business finance. Lenders will assess:

• Ownership structure — whether the property is owned personally or by a limited company (company ownership often simplifies borrowing by the company).
• Business finances — turnover, profit, existing debt and serviceability.
• Security — lenders may take a legal charge on the property, require director guarantees or take fixed charges over other assets.
• Valuation impact — expected uplift in property value and cashflow benefits (e.g., higher rental appeal).

UK Business Loans matches landlord applicants to brokers and lenders experienced in retrofit finance and commercial mortgages. Typical preparation before enquiry: recent EPC, planned works scope and contractor quotes, and company accounts. If you’re ready, start with a Free Eligibility Check: Free Eligibility Check.

Can tenants use business loans to fund upgrades?

Yes — tenants can borrow to fund tenant improvements, energy efficiency measures and fit‑outs when the lease allows. Key points:

• Obtain landlord consent in writing before works begin if lease requires it.
• Check reinstatement obligations — some leases require tenants to return the property to its original condition at lease end; this affects whether tenants will invest in permanent fixtures.
• Consider green lease clauses — these can set out how costs and savings are shared and whether tenant investments are treated as fixtures or removable trade fittings.
• Lenders typically want evidence of landlord consent, installer contracts and projected energy savings. Tenants usually borrow through their trading company and must show business accounts and cashflow to support repayments.

To explore tenant funding options and connect with lenders who underwrite fit‑out or tenant‑improvement finance, complete a quick enquiry: Get Quote Now.

Practical 7‑point application checklist

Before you request matched lenders, gather:

1. Proof of ownership or a copy of the lease showing obligations.
2. Recent EPC and any retrofit survey or energy audit.
3. Contractor quotes and scope of works (detailed where possible).
4. Business accounts or management accounts for the borrower entity.
5. Evidence of projected energy savings or payback analysis.
6. Timelines for works and any grant applications already applied for.
7. Decision‑maker contact details and authorisation to proceed.

UK Business Loans can begin matching from this package of information — start here: Free Eligibility Check.

Costs, grants and tax considerations

Costs vary widely by building and measures. Small items (LED lighting) can be under £10k; larger fabric works, full HVAC replacement or building‑wide heat pump and insulation programmes can run into tens or hundreds of thousands. Grants and public schemes (local authority programmes, Salix for public sector, regional retrofit funds) can reduce the capital needed — always check current GOV.UK and local portals.

Tax treatment: some energy‑saving investments may qualify for capital allowances or other tax reliefs — consult your accountant for formal advice. Grants and incentives may also have eligibility rules that affect finance structuring.

Risks, legal & valuation considerations

Key risks to consider:

• Lender security may limit future borrowing or sale negotiations — legal charges on property are common.
• Lease clauses may require reinstatement or landlord approval, increasing cost and complexity.
• If the tenant pays for works that ultimately increase property value, negotiation is needed to capture benefit or compensation on lease expiry.
• Grant availability may change; avoid relying solely on promised public funding unless confirmed.

Recommended advisers: solicitor for lease and consent issues, chartered surveyor for valuation and mortgage consent, and an accountant for tax treatment.

Case scenarios

Scenario A — Landlord remortgage to meet MEES
A landlord company remortgaged the building to release capital for a whole‑building retrofit (insulation, new windows, central HVAC and monitoring). Lenders required a valuation, EPC improvement forecast and company accounts. The work raised the EPC grade and made the building more attractive to tenants, increasing rental interest after completion.

Scenario B — Tenant funds fit‑out
A trading company tenant secured a business loan to replace lighting and upgrade air conditioning within demised premises. The lease required landlord consent and a modest reinstatement covenant; the tenant negotiated that new equipment would be removable at lease end. Lender accepted contractor quotes and landlord letter of consent.

Scenario C — Shared cost via green lease
A green lease amendment split capital cost for roof‑mounted solar between landlord and long‑term tenant. The landlord took a mortgage top‑up; the tenant agreed a service charge contribution and shared in guaranteed energy savings. Both parties benefited from lower operational costs and improved building valuation.

Want to discuss a scenario like these? Match with experts who handle sustainability projects: Start Your Enquiry.

How UK Business Loans works for EPC / MEES projects

1. Complete a short enquiry form (about two minutes) — it’s an information form, not an application.
2. We assess your needs and match you to the most relevant lenders and brokers in our panel who specialise in retrofit, green loans or commercial mortgages.
3. Matched lenders or brokers contact you to carry out quick eligibility checks and provide indicative quotes.
4. You compare options, proceed with the lender that best suits your needs — no obligation to accept any quote.

UK Business Loans is an introducer — we do not provide lending funds ourselves. Our service helps you get fast, relevant contacts to progress quotes and applications for projects from around £10,000 upwards. Begin with a Free Eligibility Check: Free Eligibility Check.

Frequently asked questions

Next steps & reassurance

If you’re planning EPC or MEES upgrades, don’t delay — funding options are available and matching to the right lender speeds decision making. Complete our short enquiry form (it’s not an application; it’s information to help us pair you with the best lenders/brokers) and receive tailored contact and quotes: Get Started — Free Eligibility Check.

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For more on the kinds of finance and lenders that specialise in energy upgrades see our industry page on sustainability business loans.

Last reviewed: 29 October 2025. Check GOV.UK for the latest MEES/EPC guidance and consult professional advisers for legal or tax advice.

1) Can landlords or tenants use a business loan to fund EPC / MEES upgrades?
Yes — both landlords and tenants can often use business loans for EPC/MEES works depending on ownership, lease terms and lender criteria.

2) What types of business loans fund sustainability or MEES retrofit work?
Common options include commercial mortgage top‑ups/remortgages, green retrofit loans, asset/equipment finance, ESCO/PPA arrangements, bridging loans and tenant fit‑out loans.

3) How much can I borrow for EPC or retrofit work?
Borrowing typically starts around £10,000 for retrofit and fit‑out loans, with commercial mortgages and remortgages available for much larger sums (often £100k+).

4) Will applying through UK Business Loans affect my credit score?
No — completing UK Business Loans’ enquiry form is informational only and won’t affect your credit score; lenders may perform checks only if you proceed with an application.

5) How long does it take to get funding for MEES/EPC upgrades?
After you submit the enquiry form you can be matched to lenders within hours, but actual drawdown times vary by product — bridging loans can be days to weeks, while commercial mortgages usually take several weeks.

6) Do lenders require security for sustainability business loans?
Some lenders require security such as a legal charge on the property, director guarantees or asset security, while unsecured green retrofit loans may be available depending on credit and lender appetite.

7) Who is responsible for paying for MEES works — the landlord or the tenant?
Responsibility depends on the lease: landlords are typically responsible for major building works, tenants for fit‑outs, but lease wording and green lease clauses can alter obligations and cost sharing.

8) Are there grants, tax breaks or incentives that reduce the amount I need to borrow?
Yes — local authority schemes, Salix and other grants or capital allowances can reduce capital costs, but availability varies so check GOV.UK and consult your accountant before relying on them.

9) What documents do lenders typically ask for when considering retrofit finance?
Lenders usually request proof of ownership or lease, a recent EPC and energy audit, contractor quotes and scope of works, and business accounts or management accounts for the borrowing entity.

10) Are there dedicated green business loans with better rates for energy efficiency projects?
Some lenders and specialist green products do offer favourable terms for verified energy savings or sustainability credentials, but rates and eligibility depend on lender criteria and project evidence.