It Ain’t Easy Being Green… But it Can Help Businesses Secure Commercial Loans

Eco-friendly building standards are important and beneficial for the earth and your bottom line. In some cases, it can even help you get approved for large and multiple SBA commercial loans.

The SBA 504 Loan was specifically designed for helping small businesses as they struggle to get a loan to take their growing businesses to the next level. According to the SBA.gov website, this loan program, also referred to as the Certified Development Company (CDC)/504 Program, is “a long term financing tool for economic development within a community. CDCs provide growing businesses with long-term, fixed-rate financing for major fixed assets, such as land, buildings and machinery and equipment.

In the case of green constriction, energy efficient buildings, green retrofitting and renovation, and renewable energy production for commercial purposes, the SBA Green 504 loan has a number of benefits for applications. It serves as a second mortgage that can be up to $5.5 million, with loans available on a “per project” basis. This allows for larger transactions in the $20 million range, because the standard SBA eligibility maximum of $5 million per borrower does not apply in the instance of the Green 504 program.

The Green 504 also does not include the job creation and retention requirements of a typical SBA 504, so smaller businesses with fewer employees now have a better opportunity to garner larger loans for businesses that have a lot of space, but not that many employees. This loan also offers financing for the acquisition, development or even refinancing of energy efficient buildings with tangible net worth and income requirements maximums increased to $15 million and $5 million for small and mid-sized businesses.

What are the Qualifications Small Businesses Owners Need to Get Approved for Green 504 Commercial Loans?

Business owners that are currently leasing or own a business can qualify by financing another building that consumes 10 percent less energy than the current owned or leased building. Another qualifying factor is if you purchase a building you’re currently leasing with the intent to make improvements to reduce energy usage by 10 percent. Examples of improvements include swapping out standard light bulbs for LED lighting, which can amount to up to 30 percent of a building’s energy consumption. A third option is if you currently lease or own, but want to construct a few building with 10 percent less energy usage, including LED lighting, better insulation or more efficient HVAC system.

Building or adding energy efficient strategies to an existing building are a win-win solution for any community, and there are even more benefits.

The Green 504 makes it easier for businesses that don’t have a government guarantee garner financing to purchase, build or even refinance numerous buildings with the maximum $5.5 million in SBA financing for each individual building project. That number refers to the SBA guaranteed second mortgage, and with no set limit on the first mortgage amount limit, larger projects are now very doable through the Green 504.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.