The Benefits of an SBA 504 Green Energy Loan
What is an SBA 504 Green Loan?
Small Business Administration 504 Green Loans offer cost saving advantages that can grow and stabillize your business. An affordable commercial loan, with 10% down/10% equity, SBA 504 Green Loans can be aquired for energy effiecient building construction, renovation, and refinance projects, as well as the finance of renewable energy equipment upgrades. With no lending cap, SBA 504 Green Loans are an option for large projects ranging $5-20 million.
In addition, the SBA Green 504 Loan allows for both larger and multiple SBA loans to the same applicant while removing the jobs creation / jobs retention requirement that often prevented smaller businesses from gaining access to larger funds. It also provides financing for both small and mid size businesses to acquire, build or possibly refinance energy efficient buildings.
Green Loans for energy efficient construction, renovation or refinance, and renewable energy equiptment.
Who Qualifies for an SBA 504 Green Loan?
If you lease or own a building, you have a few options to qualify:
You can qualify if you lease or own a building now and finance another building that will consume 10% less energy than the building you currently own or lease.
You can qualify if you lease a building now and you decide to purchase it and make improvements to it that cut your energy consumption by 10%.
You can also qualify if you lease or own a building now and you build a new facility that is 10% more energy efficient.
The easiest is to acquire or construct a building that uses 10% less energy than what you are currently using. Efficiency is the goal with SBA Green 504 Loans so the 10% reduction must be in energy consumption, not in dollars saved on lower utility bills.
If you DO NOT lease or own a building:
You can acquire or build a new building that produces enough of it's own renewable energy to cut it's energy consumption based upon what it would have been without the improvements.
You do not own a building currently and have no baseline for energy consumption: SBA requires that you produce enough of your own energy to account for 10% of your total consumption since you do not have a existing building to benchmark against. You may produce the energy multiple ways, using any of the common sources of renewable energy (solar, wind, geothermal, etc.), and the costs of installation can be included in the loan amount.
You can qualify if your business produces renewable energy or renewable fuels for others - or for sale to the local utility.
Am I Elligible to Qualify for an SBA 504?
To be eligible for a 504 loan you need to be a green qualifying small or mid-sized business, typically defined as:
51% or More Owner Occupied*
Tangible Net Worth Below $15 million
Avg Net Income Not More Than $5 million**
* For new construction, your business must initially occupy at least 60% of the commercial space.
** Net income is calculated after Federal income taxes (and excluding carry-over losses) for the 2 fiscal years prior to application. Manufacturers are defined as having fewer than 500 employees.
What are the Benefits of Efficiency Upgrades and Green Business Practices?
Going green is smart business. Forget the warm and fuzzy feeling, when you choose sustainability you choose stability and cost savings. Green practices translate into savings, growing your profitability while subsequently cutting opperating costs through energy, water, and waste reduction. Green businesses are a draw to clients and employees; maintaining a culture of sustainability helps to attract and retain top talent, giving you a competitive advantage and market stability. While decreasing costs, sustainable business practices increase financial potential.