Companies adopting Product-as-a-Service (PaaS) models, which allow customers to purchase access to a product rather than the product itself, continue to struggle in obtaining financing when seeking to introduce such circular business models. To close the knowledge gap between circular entrepreneurs and financiers, Circle Economy, an ECESP Coordination Group member, launched the PaaS Question Kit in October 2019.
The main issue is a lack of knowledge on the part of entrepreneurs, but also financiers, and the absence of a financial narrative for PaaS models that fits within the risk parametres of financiers. More concretely, PaaS models are - sometimes falsely - perceived as risky due to the way businesses present themselves and how financiers assess risk.
The Kit leads both entrepreneurs and financiers through 15 questions they need to ask themselves before starting their conversation. The ultimate goal of the Kit is to remove the knowledge barrier and open up more financing opportunities for circular companies.