New Energy Efficiency Public Policy Goals

In the interest of conserving energy and encouraging sustainable design and renewable energy production, new Public Policy Goals with higher 504 loan limits have been announced. As a quick refresher, Public Policy Goals provide a benefit to the small business borrower – the job retention/creation requirement is waived, and the 504 loan can be up to $2 million (and in the case of renewable energy production, can go as high as $4 million!). If the small business can reasonably demonstrate that it will reduce its energy consumption (not cost) by at least 10%, the project will quality under this public policy goal and is eligible for up to $4 million in 504 financing. Also, if a building meets the sustainable design definition under LEEDS (the building does not have to be formally certified to meet SBA’s requirements), the project qualifies for a 504 loan of up to $2 million.

If a small business is generating energy for its own use or manufacturing for others (i.e., biomass, hydropower, geothermal, solar, wind, ocean thermal), it can qualify for up to a $4 million 504 loan. Project cost can include the installation costs of the equipment. Our loan officers would be pleased to review the information with prospective borrowers to see if they qualify. More details will follow in a subsequent article.

Closing Tip

If your bridge loan is maturing, please give your loan closer a call to discuss the status of the 504 loan closing. We want to be sure you don’t have to make multiple loan committee presentations for multiple extensions. Sometimes, an SBA specific requirement presents a problem for the business owner, and we need to help them work through it. Often, the small business owner is so busy trying to keep his business on track after the distractions of a real estate project that we have difficulty getting them to focus on the 504 closing. A little nudge from the bank when the bridge loan is maturing often helps gets the 504 loan to closing faster!