Small Business Loans Go Green

Florida First Capital Finance Corporation (FFCFC) informs us that new SBA 504 public policy goals will benefit businesses that go green.

As a part of the Energy Independence and Security Act of 2007, Congress added new public policy goals to the SBA 504 loan program targeting businesses willing to go green.
The U.S. Small Business Administration 504 program is intended to create jobs based upon a formula that has been modified several times over the years. Particular preference is given to rural, economically disadvantaged areas and minority and female applicants for which SBA may waive the job creation requirement. The loan proceeds must be used to finance long-term assets such as real estate and fixtures which makes the program ideal for construction, for expansion of manufacturing facilities and other job intensive structures.

The SBA recently interpreted Congress’s words and released new policies. Following is a current understanding of which projects are now eligible for 504 financing:
LEED certified projects, at any level — Certified, Silver, Gold or Platinum — or using any other rating system that shows the increased use of sustainable, low-impact design.
Projects that reduce energy consumption by at least 10%.
Projects that generate renewable energy or fuels, such as biofuels.
The use of sustainable design makes a business eligible for a 504 loan at the $2 million level. Even better, debentures of up to $4 million are available for projects that reduce energy consumption by 10% or generate renewable energy or fuels.
For projects generating renewable energy, it has been clarified that it does not need to be the business’s primary business activity, just a method of meeting its own energy needs. Under this interpretation, projects in any industry could, for example, purchase solar panels for their own use and qualify.

« »
SBDC Footer Shadow Background