Financing for small business energy efficiency projects

The Small Business Financing (SBF) program is open for a limited launch offering products from select finance companies. During limited launch, financing is available for up to $350,000 in nonlighting projects or up to $5 million in lighting projects. To see if your project is a fit, view the prequalified Energy Saving Measures list

The SBF program is available for:

  • for-profit businesses
  • nonprofit organizations

Like all the programs highlighted on GoGreen Financing, the SBF 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.

Participating finance companies

These companies have been enrolled in the SBF program and are participating in the limited launch.

Alliance Funding Group
Alliance Funding Group Equipment lease agreements
  • $10,000-$5,000,000
  • Progress payments available on a contractor-by-contractor basis
  • Credit approval in 24-48 hours for up to $300,000 in financing
  • Electronic documents with eSignature
  • Dedicated account manager
Ascentium Capital
Ascentium Capital Equipment finance agreements
  • $10,000-$1,500,000
  • Mobile app to provide exact payment quotes to customers
  • Credit decisions within 2 business hours for up to $250,000 in financing
  • Simple e-sign, 1 page contract for customers
  • 95% prefunding for contractors who pass credit checks
DLL Group
DLL Group Loans, leases and service agreements
  • $10,000-$5,000,000
  • Progress payments or escrow funding for contractors who pass credit checks
  • Final payments within 24 hours of project and document completion
  • Extended terms available for improved customer cash flow
  • Dedicated account manager throughout the entire financing process

Eligible customers

The SBF program is 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 $37.5 million depending on industry

Finance companies and contractors who serve larger for-profit businesses and nonprofit organizations 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 Saving Measures or demand response. Up to 30% of the credit-enhanced financed amount may fund nonenergy efficiency improvements. Additional nonenergy improvements may be financed, but that portion of the financing will not receive a credit enhancement. Financing for distributed generation (DG) improvements, like solar photovoltaic (PV), may be financed but 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 (available in 2020)

For more information

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

Jonathan Verhoef
jverhoef@sto.ca.gov

SBF program timeline

Finance Company enrollment Now Open! Learn More
Contractor/PD enrollment Now Open! Enroll today
SBF program limited launch Now Open!  
SBF full program launch August 2019  

small business

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
 

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 small businesses

  •  Credit enhancement allows financing companies 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