The Small Business Admistration has amended its existing 504 loan program, which was originally created to encourage small- to medium-sized business owners to acquire commercial property by providing them with long-term, fixed-rate financing. One of the biggest accommodations is that these loans required a minimal equity requirement and the size of the loan correlates directly to the borrower's impact on the community, including revitalizing and stimulating local business, improving and diversifying the district, and expanding a minority-, woman-, or veteran-owned business.
The new loan program has now been doubled to a maximum of $4 million to borrowers who reduce energy consumption by 10 percent or generate renewable energy. This opens up whole new avenues to businesses that focus on sustainable design, reduce energy consumption, and promote renewable energy generation. This is where some of the federal government's stimulus programs' rubber is beginning to meet the road. Although the SBA 504 loan program was originally intended to revitalize local areas through its financing program, this new expansion literally broadens these possibilities on an exponential level. Sustainability, in a way, has been considered a minority class on a pure business level. Now the seeds are being planted in order to invigorate a model that is not only essential on an environmental level, but on a profitable business level as well.
The biggest issue that many owners will have is how to navigate the program. However, there are firms already working to see that it can succeed. For example, Partner Energy, a Los Angeles-based company, is a local company that works with owners and users of real estate to build energy-efficient models for a proper capital investment return. This kind of access to models of energy efficiency makes it easier for business owners to secure an SBA 504 loan.
There are many detractors that believe that the stimulus programs are nothing more than handouts. However, as more and more of these financing programs begin to hit the field level of main street business, these enterprises will begin using the monies towards future investment and growth.
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