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Financing circular business models - risks and opportunities

Manufacturing companies who want to switch to more circular business models, such as selling products as a service or function, will see balance sheet and cash flow effects that require new financing solutions. The project wants to investigate how financiers' perceptions of risk and security will need to change to become an opportunity.

The project will investigate the role of financing for SMEs transitioning to circular business models - as obstacles and opportunities - and also map out how the financial sector looks at circular business models in terms of risk assessment, valuation, return requirements and long-term perspective.

We do this in collaboration with manufacturing companies and banks. The method is mainly interviews with manufacturing and selling SMEs, and with a number of banks, in Sweden and Europe. We also map how financing is generally solved in manufacturing industry today. Overall, this will give a number of case studies on the challenges of manufacturing companies, as well as an overview of the banks' views on financing circular business models, from which we can understand new opportunities, constraints and roles for the financial sector as a whole.

From the perspective of both the financial and manufacturing sectors, there are great benefits and potential business opportunities in creating innovative solutions for the needs arising from the new business models in the manufacturing industry. Both sectors are in a disruptive era when old ways of earning money and valuing assets and risks are challenged by new business logic and new technologies that involve new forms of development, production, delivery, payment, etc.

This project generates new innovative knowledge about financing and its role as a facilitator in corporate transition to a more circular economy and real resource effectiveness.


Final report and White paper with short summary of results and recommendations

Ann-Charlotte Mellquist

Contact person

Ann-Charlotte Mellquist

Senior Researcher

+46 10 228 40 05
ann-charlotte.mellquist@ri.se

Read more about Ann-Charlotte