Financing for small business energy efficiency projects

The Small Business program will be available for:

  • for-profit businesses
  • nonprofit organizations

Like all the programs highlighted on GoGreen Financing, the Small Business program is designed to encourage growth in private market lending and features a credit enhancement to help financing entities mitigate risk. The flexibility of this program gives the customer the option to combine financing with utility rebates and incentives and gives finance companies the option to collect repayments through the customers’ energy bills.

Eligible customers

The Small Business program will be available for businesses and nonprofit organizations that meet one of the following size requirements

  • 100 or fewer employees, or
  • annual revenues of less than $15 million, or
  • meet SBA small business size requirements+
    • Annual revenue limits range from $750,000 to $38.5 million depending on industry

Finance companies and contractors who serve larger for-profit businesses and nonprofit organizations as well as public buildings that do not meet the small business definition may be interested in the Nonresidential program.

Qualifying projects

At least 70% of the credit-enhanced financed amount must be Energy Savings Measures or demand response. Up to 30% of the credit-enhanced financed amount may fund nonenergy efficiency improvements. Financing for distributed generation (DG) improvements, like solar photovoltaic (PV), may be included but this portion of the financing will not be credit-enhanced.

Financial products supported

Products supported will include loans, leases, equipment financing agreements, service agreements and savings-based payment agreements up to $5 million.

Eligible properties

The eligible property may be owned or leased. The eligible property must receive electric and/or gas service from any of the following investor-owned utilities:*

  • Pacific Gas and Electric Company (PG&E®)
  • San Diego Gas & Electric Company (SDG&E®)
  • Southern California Edison (SCE)
  • Southern California Gas Company (SoCalGas®)

Repayment options

Finance companies can give customers the option to repay:

  1. Direct to the finance company
  2. Through the utility bill utilizing on-bill repayment
    • On-bill repayment feature will be added to the program in 2019

For more information

For more information on the Small Business program, please contact the following program administration representative:

Jonathan Verhoef
jverhoef@sto.ca.gov

Fall 2018 program development

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) is now accepting applications from finance companies who want to participate in the Small Business Financing (SBF) program. Click here to learn more and download the application.

Contractors/ESCOs and project developers will be able to enroll in February. Learn more on the contractor resources page.

To learn more about the SBF program please click here+ to visit CAEATFA’s website for the latest updates.

small business

Benefits for small businesses

  •  Credit enhancement allows lenders to offer attractive financing terms
  •  Both building owners and building tenants are eligible
  •  Broad list of measures qualify for financing
  •  Multiple paths to eligibility allow projects to be simple or highly customized
  •  Flexible financing allows up to 30% of financed amount to fund nonenergy efficiency improvements
  •  Potential to pay for efficiency upgrades through energy savings

Benefits for finance companies

  •  Mitigate risk through a credit enhancement, provided at no cost to you or your customers. The first $1 million of every enrolled financing agreement will receive a loss reserve contribution. Recover up to 90% in the event of a charge-off.
  •  • Utilize the credit enhancement to approve a wider set of customers or offer more competitive rates and terms.
  •  Partner with the State of California and investor-owned utilities to reach more customers through a statewide marketing campaign

Benefits for contractors, ESCOs, and project developers

  •  Grow your business by offering customers attractive financing to complete energy efficiency upgrades
  •  Broad list of measures qualify for financing. Multiple paths to eligibility allow projects to be simple or highly customized
  •  Present your customers an attractive offer when OBF or commercial PACE won’t work
  •  Take advantage of a statewide marketing campaign
  •  Online interface allows for easy project entry and rapid qualification