The SBA’s Energy Loan Program allows SBA lenders to make loans to business owners and entrepreneurs with twice the SBA guarantee provided they put in place a plan to reduce their energy consumption by 10%. SBA loans offer businesses great leverage with 90% financing– Certified Development Company (CDCs) secure an SBA 504 loan for up to 40% of the deal with the SBA lender providing the remaining 50% of the project funding. By putting in place a plan to improve energy efficiency of the project, the CDC can double the amount of the SBA guaranteed loan; therefore allowing SBA lenders to double the size of the deals that can be done through the SBA program.
Partner Energy is in the business of providing energy audits to borrowers and outlining the a plan to improve their energy efficiency. Normally, the saving opportunities are inexpensive and are often great investments independent of the financing event. A few examples of energy efficiency investments that often have payback periods that are less than 3 years are: lighting retrofits, better HVAC controls, and variable speed drives.
In some instances the borrower achieves the savings by moving from a less efficient building to a more efficient building and there is not investment necessary at all. In these instances Partner Energy’s mission is to model old and new buildings correctly so that this argument will fly through the SBA’s underwriting process.
In conclusion, SBA Energy Loans offer great financing and only requires borrowers to make inexpensive common sense investments that create significant savings.