Small business owners can rarely find the time to arrange financing for capital improvements unless they see a significant, direct, and immediate benefit to their company’s bottom line. In an expanding economy, businesses are inclined to invest in projects that increase sales and expand their markets, while in tight economies they focus o n reducing expenses, saving money, and surviving on less.

The idea of spending money to save money can be difficult for a small business owner, especially in a depressed economy. Yet small businesses that have successfully implemented clean energy projects prove that these projects have the capacity to improve the business’s cash flow in the long run.

According to the ENERGY STAR® program, 30% or more of the charges on most commercial utility bills come from wasted and underutilized energy. Financing clean energy projects helps small businesses take what they’re currently paying for wasted energy and invest those funds in making energy efficiency and renewable energy improvements, resulting in future energy savings.

Unfortunately, small businesses often find it difficult to obtain financing for their clean energy projects, and when they do, they often feel that the rates are high and the repayment terms short. The 2009 Recovery Act provides funds that support small business financing programs. By providing existing lenders with low-cost capital to revolving loan funds for direct lending and/or credit enhancements (such as loan loss reserve funds), these Recovery Act funds help reduce program risk. These sorts of financing measures result in improved loan pricing and longer terms available to the borrower seeking to fund clean energy projects.

The following are examples of successful small business programs across the nation:

• Enterprise Energy Fund, New Hampshire
• Efficiency Maine: Low-interest Loans for Small Businesses
• Dollar and Energy Saving Loans, Nebraska
• AlabamaSAVES
• Oregon Energy Loan Program (SELP)

For many small businesses, clean energy improvements make good sense. With access to available financing, they can invest in projects that reduce their energy costs and consumption. To find out what financing programs are available for small business in your region, contact your local or state energy office.

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For further questions regarding clean energy financing for small businesses, please comment on this post or contact a Technical Assistance Provider by linking to the Solution Center.

Content for this Blog post courtesy of The Cadmus Group