# Should an MSME choose a green loan or a sustainability-linked loan?

Canonical: https://senseible.earth/answers/green-loan-or-sll-which-suits-msme

Choose a green loan when the money is for a specific project such as solar, efficient motors or a cleaner boiler. Choose a sustainability-linked loan when you want general funding tied to company-wide targets like emissions intensity. Many MSMEs start with a green loan.

## Green loan

- Money used only for named green projects.
- Reporting on how the money was spent and the impact.
- Easier to start with one clear project.

## Sustainability-linked loan

- Money for general purposes.
- Interest linked to KPIs such as emissions per tonne.
- Needs a baseline, yearly reporting and usually external verification.

## What decides it

If you do not yet track emissions monthly, a sustainability-linked loan is hard to run. A green loan for one project builds the records you would need later.

## What Senseible does here

Senseible turns invoices and bills into dated, fingerprinted emission records, the evidence a lender usually asks to see first.

- [Green Loan Principles explained](https://senseible.earth/answers/green-loan-principles-explained)
- [SLL KPI examples](https://senseible.earth/answers/sustainability-linked-loan-kpi-examples)
- [How ambitious should SLL targets be?](https://senseible.earth/answers/how-ambitious-should-sll-targets-be)

Sources: [Loan Market Association, Green Loan and Sustainability-Linked Loan Principles](https://www.lma.eu.com), [Reserve Bank of India](https://www.rbi.org.in)

Last reviewed 2026-10-22.