Green 504 Loans
The SBA Green 504 Loan has multiple benefits:
It allows for both larger SBA loans and multiple SBA loans to the same applicant(s).
The Green 504 loan is a second mortgage that can be as much as $5.5 million which makes transactions in the $12 to $20 million range possible...AND...loans are available on a "per project" basis. In other words, the "regular" SBA maximum eligibility limits of $5 million per borrower do not apply and larger businesses are able to utilize multiple 504 loans on multiple buildings.
The usual SBA 504 jobs creation/jobs retention requirements do not apply making larger loans for businesses with fewer employees possible. This could be very useful for qualifying self storage businesses, hotels, parking garages and others with lots of square footage but few employees.
It also provides financing for both small and mid-size businesses to acquire, build or possibly refinance energy efficient buildings. The larger loan sizes are more suitable to larger businesses and the recently expanded maximum tangible net worth and income requirements of $15 million and $5 million respectively make it easier for larger businesses to qualify.
If you need funding for a renewable energy project or renewable energy equipment financing then please visit our project financing page.
How To Qualify For the Green 504
The easiest way to qualify is to acquire or construct a building that uses 10% less energy than what you are currently using. It is important to remember that the 10% reduction is in energy consumption not dollars saved on lower utility bills.
Qualifying examples assuming you currently own or lease:
- 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%. This could be as simple as a lighting retrofit using LED lighting since lighting typically accounts for 20 to 30% of a building's energy use.
- You can also qualify if you lease or own a building now and you build a new facility that is 10% more energy efficient. Again, lighting is a great way to accomplish this, but there are numerous other means as well including better insulation, modular construction using structurally insulated panels, a better HVAC system, energy efficient windows, etc..