Exciting news: via Melodies in Marketing, we learn that the Small Business Administration's 504 loan program, designed to aid small business owners seeking to build commercial real estate, has been expanded to provide extra incentives for such builders to construct green-friendly projects.?
The changes, which are the result of 2007's Energy Independence and Security Act, increase the ceiling for the amount of project financing guaranteed by the SBA under the 504 program to $4 million, should the project in question be demonstrably green-friendly--specifically, should it involve using energy-saving technologies to build or retrofit buildings such that energy consumption is reduced by at least 10%. Previously, the limit was either $1.5 million or, under special circumstances, $3 million.
A prospective lender is also eligible should it elsewhere in its business utilize renewable energy technologies--whether as a part of this specific project or even as a part of their own day-to-day business doings.
Finally, small businesses may apply for up to $2 million in 504 financing if their buildings utilize sustainable design techniques.
Under the 504 apparatus, the cut guaranteed by the SBA (which is actually provided by a Certified Development Company) constitutes 40% of the total financing (10% is required in a down payment; the remaining 50% comes from a traditional loan). What this means is that, in guaranteeing up to $4 million, the SBA is opening the door to projects costing as much as $10 million.
Unlike the expansion of Community Express loans--which actually denied women and minorities a valuable niche program--this should simply work to increase the percentage of commercial facilities built by small businesses that are green-friendly. It's hard to find a problem with that.