An SBA 504 Loan Can Finance Your Energy Upgrade in Nevada

Nevada has long been a leader in clean energy, and it is striving to maintain this momentum as its energy market evolves. Advocates are calling clean energy “a market opportunity,” as new technology is attractive to the state and energy  efficiency funnels growth into the economy.

Small business owners can play a big part in this movement, while achieving business goals of their own. One way to do this is with an SBA 504 loan. Reducing energy consumption is a Small Business Administration public policy goal, so loans that feature energy efficiency have many special advantages.

  • Bank 1st mortgage: 50%
  • SBA/CDC 2nd mortgage: 40%
  • Borrower: 10%

With the SBA energy-efficiency program, there is no limit to the size or number of projects qualified business owners may finance with a 504 loan, and the maximum size of the SBA debenture is raised from $5 million to $5.5 million. It is a common misconception that going green is more expensive than not. But in reality, going green gives you access to even more 504 financing and will save you money on energy expenses.

You increase your crediting opportunities, as well as enjoy ongoing cost savings. There are many options for incorporating energy-efficient technology into the fabric of your business, as we will see below.

How to Qualify for an Energy-Efficiency Loan

Qualifying for a 504 energy-efficient loan can be as simple as keeping an eye out for upgrade opportunities while investing in fixed assets. This can mean reducing energy consumption by 10% or generating renewable energy or fuels to make up 10% of energy use. Solar and wind power are common options for renewable energy generation, but production of fuels such as biodiesel or ethanol also qualify. You can also:

  • Buy or construct a building that consumes 10% less energy than your current location
  • Buy the building you now lease and make upgrades to consume 10% less energy
  • Buy or construct a building that produces 10% of the energy it consumes -or- produces fuel to reduce fossil fuel consumption, using equipment financed through the loan

Reducing energy consumption means taking advantage of new opportunities. You can add new equipment to facilities, or upgrade old equipment to the latest standards.  Improvements can be made to premises, including but not limited to:

  • Upgrades to lighting, control systems or HVAC
  • Improvements to the building envelope (such as windows or insulation)
  • Water conservation measures
  • Installation of solar panels or a wind generator
  • Installation of electric vehicle charging stations

There are more specialized options as well, tailored to encompass your particular business requirements. For example, food service businesses might consider upgrading their refrigeration equipment, as it typically accounts for 25-60% of electricity usage.

Energy-Efficiency Opportunities for Any Industry

Nationwide, operators in the hospitality industry are the most common recipients of 504 energy-efficiency loans. The unlimited funding available means hotel operators can use the financing to expand their holdings, as long as the new acquisitions are “green.”

Hotels are far from being the only businesses that can benefit though. New offices, factories and warehouses often provide performance indicators that exceed those of existing facilities. Certain industries show particular promise for increasing efficiency:

Facility Opportunity
Assisted living, specialized nursing facilities As intensive users of electricity, hot water, air conditioning and gas, they offer many opportunities to increase efficiency
Self-storage enterprises Lighting, heating, and cooling
Car washes Solar panels and glycol for water heating, lighting
Aquatic facilities (pool, aqua parks) Water heating, air conditioning

A TMC Success Story: Taking Advantage of the 504 Energy-Efficiency Program

TMC Financing, a CDC (Certified Development Company) that has serviced California and Nevada for the last thirty-five years, has helped many borrowers incorporate energy efficiency into projects in order to meet their goals. The Robert T. Eglet Advocacy Center, a new landmark in downtown Las Vegas, is one of those projects.

“The idea was to create a public building and allow different organizations to use it for events,” Eglet said. “It’s a historical district, so we wanted to do a building that looks like it’s been here for 100 years. The lobby has 16-foot ceilings and looks like a French Parliament building. It has crystal chandeliers, tin ceilings and all wood floors.”

 

Besides housing the Eglet Prince law firm, the $18-million showplace has a full-size, state-of-the-art mock trial courtroom for the UNLV William S. Boyd School of Law, a full gym with showers and 75,000 square feet of parking, wired for up to 125 electric car charging stations.

The inclusion of sustainability features was well worth it, according to Eglet. “The $5.5 million SBA 504 loan helped us not have to put so much down,” he said. “A conventional loan would have meant 20% or more out-of-pocket from our working cash. With TMC, we didn’t have as much risk.”

If you are a business owner looking to make an impact on the environment and on your finances, it might be time to start looking into the SBA 504 energy-efficiency loan. With the help of an experienced and dedicated CDC, you can get started today.

TMC Financing is a Premier Certified Lender with the SBA. The experts at TMC can help you craft a loan package to save energy and incorporate energy efficiency into your business goals. If your business is located in California or Nevada and you think this is the right option for you, contact one of our local 504 loan experts.

Barbara Morrison

Barbara Morrison

Barbara Morrison, a local small business advocate and civic leader, founded her first company TMC Financing in 1981. TMC is a Certified Development Company that provides commercial real estate financing to small business owners via the SBA 504 Loan Program. TMC consistently ranks among the top certified development companies nationwide, and has funded projects worth more than $9 billion across California and Nevada. Nearly 5,000 small businesses have benefitted from this financing, resulting in the creation of an estimated 50,000 jobs. TMC is also the No.1 SBA 504 hotel lender in the United States. Barbara is also the founder of Working Solutions, a Bay Area microlender whose mission is to provide micro entrepreneurs, particularly low-income individuals, women and minorities, with the access to capital and resources they need to start a successful business.
Barbara Morrison