Earth Day: Go Green with an SBA 504 Loan
According to the U.S. Green Building Council, “high-performing green buildings, particularly LEED-certified buildings, provide the means to reduce the climate impacts of buildings and their inhabitants.” The SBA 504 Green Loan Program is a great opportunity for borrowers to incorporate energy efficient elements or renewable energy technologies into their commercial real estate projects, while securing low interest rates and long-term fixed financing.
To be eligible for an SBA 504 Green Loan, borrowers must meet one of these metrics:
- Reduce energy consumption by at least 10 percent (compared to historical consumption) through building upgrades.
- Generate at least 15% renewable energy (solar, wind, geothermal, hydropower, and biomass) through property upgrades.
- Increase the use of sustainable design, including design that reduces the use of greenhouse gas emitting fossil fuels or low-impact design that reduce the use of non-renewable resources and minimize environmental impact.
Projects that meet one of the above benchmarks secure additional borrower benefits:
- Larger SBA/CDC Loan Amount – SBA maximum contribution increases to a $5.5 million cap (from $5 million) with no maximum total project limit.
- Higher Option for Aggregated Lending – Borrowers can have multiple SBA 504 Green Loans with no aggregate cap limit on capital (up to the maximum SBA/CDC contribution of $5.5 million per project).
In addition to the borrower-friendly terms of the SBA 504 Green Energy loan, making energy efficient upgrades reduce energy costs over the long-term. It is also an opportunity to tie company brand identity to the fight against climate change.
To learn more about how your business can go green with an SBA 504 loan, download the program flyer and connect with a member of SomerCor’s loan origination team today!
