| Go Green with SBA 504 Loans |
 As 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 "Energy Act" has added three new energy efficiency public policy goals for the 504 program, and permits financing of up to $4 million for two new categories of 504 Loans.
The three new energy public policy goals are as follows:
- Reduction of energy consumption by at least 10%.
- Increased use of sustainable design, including designs that reduce the use of greenhouse gas emitting fossil fuels, or low-impact design to produce buildings that reduce the use of non-renewable resources and minimize environmental impact. Sustainable Design is as defined by Leadership in Energy and Environmental Design (LEED) standards.
- Plant, equipment and process upgrades of renewable energy sources such as the small-scale production of energy for individual buildings or communities consumption, commonly known as micropower, or renewable fuels producers including biodiesel and ethanol producers.
Projects meeting any of these three new energy public policy goals stated above are eligible for 504 loans of up to $2,000,000 without creating or retaining jobs. Furthermore, debentures of up to $4,000,000 are available for projects that meet the new goals of reduction of energy consumption by at least 10% or generation of renewable energy.
To qualify for the reduction of energy consumption goal, the applicant must show how the energy costs will be reduced. Several questions that will need to be answered include:
- What is the present energy consumption?
- What is the projected energy consumption?
- How were such projections made?
- What is to cause the reduction?
- Is the reduction 10%?
Improved HVAC, improved insulation/lighting and superior design/efficiency in a new or improved location are a few examples of how this new goal can be attained.
For projects generating renewable energy, 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. Other examples of renewable energy sources include: biomass, hydropower, geothermal, wind and ocean thermal.
Should you have any questions in regards to the new public policy goals or believe you have a project that may qualify, please feel free to contact the NEDCO offices. |
