As part of the larger Biden-Harris Administration efforts to usher in the country’s clean energy future, Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA), has announced that the agency has removed the cap on lending for clean energy projects through its 504 Loan Program.
According to Administrator Guzman,
Small businesses and start-ups play a crucial role not only in innovating to develop the future of climate technology but also in adopting sustainable practices and transitioning to clean energy to help advance President Biden’s ambitious goal of net zero by 2050.
While the Biden-Harris Administration is making significant public investments in infrastructure, clean energy, and climate resilience, the SBA is working to ensure small businesses can get the funding they require to support the country’s shift to a clean energy economy. The SBA may better position itself to accomplish this important aim by lifting the cap on 504 loans for energy projects and providing an overview of SBA options in the White House Climate Capital Guidebook.
Effective April 30, 2024, the Small Business Administration (SBA) has lifted the $16.5 million cap on Energy Public Policy projects financed through the 504 Loan Program, as stated in Procedural Notice 5000-856984. Borrowers may now obtain as many 504 loans as they otherwise qualify, up to a maximum of $5.5 million. Projects about energy public policy include those that increase solar power or decrease energy use through retrofits, among other initiatives.
Eligibility & Qualifications
To be eligible for the SBA 504 Green Loan program, businesses must:
- Reduce energy consumption by at least 10% through building upgrades.
- Generate at least 15% renewable energy (solar, wind, geothermal, hydropower, and biomass) via property improvements.
- Implement sustainable designs that decrease greenhouse gas emissions or utilize low-impact methods to minimize environmental impact.
Meeting one of these criteria offers additional borrower benefits:
- Increased SBA/CDC Loan Amount: The SBA’s maximum contribution rises to $5.5 million per project, with no overall project cost limit.
- Expanded Aggregated Lending Options: Borrowers can now obtain multiple SBA 504 Green Loans without an aggregate capital limit, maintaining the $5.5 million maximum contribution per project.
Why You Should Consider A 504 Green Loan?
With the no-cap announcement, the SBA keeps pushing its core lending and investment initiatives in the private capital markets to help small businesses that power the clean energy sector access financing. Small and mid-sized firms can integrate renewable energy technologies or energy-efficient features into their commercial real estate projects with the SBA504 Green Loan Program, all while obtaining long-term fixed financing at below-market rates. National Tax Group is a certified SBA-approved energy modeler. Armed with our report, your business can now explore SBA service providers to fulfill your claim. Reach out to us now.