SBA revises rules on 504 Loan Program for clean energy projects
New rule removes cap on only three loans of up to $5.5 million each.
The U.S. Small Business Administration (SBA) has announced that the agency has removed its 504 Loan Program’s cap on lending for clean energy projects as part of a broader effort to usher in the nation’s clean energy future.
Under the previous rules, small businesses financing “energy public policy projects” were limited to three SBA 504 loans of $5.5 million each, for a maximum total of $16.5 million. Going forward, borrowers may secure as many 504 loans up to $5.5 million for which they otherwise qualify. Energy public policy projects include those that reduce energy consumption (e.g., retrofits) and renewable energy projects (e.g., adding solar).
“Small businesses and start-ups play a crucial role not only in innovating to develop the future of climate technology but also in adopting sustainable practices and transitioning to clean energy to help advance President Biden’s ambitious goal of net zero by 2050,” said SBA Administrator Isabel Casillas Guzman. “As the Biden-Harris Administration makes historic public investments in climate resilience, clean energy, and infrastructure, the SBA is focused on ensuring small businesses have access to the capital they need to help our nation transition to a clean energy economy. By outlining SBA resources in the White House Climate Capital Guidebook and removing the cap on 504 loans for energy projects, the SBA can put itself in a stronger position to achieve this vital goal.”
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