ACEEE Energy Manage

SBA Loans: A Way for Small Lenders to Fund Energy Efficiency Projects

ACEEE Energy ManageA top priority for encouraging more small lenders to fund energy efficiency projects is improved access to Small Business Administration (SBA) loan products, according to a new report from the American Council for an Energy Efficient Economy (ACEEE) and Energi.

The report “Engaging Small- to Mid-Size Lenders in the Market for Energy Efficiency Investment: Lessons Learned from the ACEEE Small Lender Energy Efficiency Convening” lists several recommendations to engage more small lenders.

Financial Assistance

  • Promote incentives, including free or discounted energy assessments and audits, project subsidies, and tax credits or deductions for energy improvement investments.
  • Establish credit enhancement from public- or private-sector sources, including loan loss reserve funds, co-participation funds, and energy performance insurance.
  • Improve access to SBA loan products.


  • Promote the Sensible Accounting to Value Energy (SAVE) Act and administrative rulemaking. Factor energy use into assessments of ability to pay debt obligation.
  • Require energy performance data through benchmarking and disclosure, equipment information, and financial performance.
  • Engage and network financial regulators to familiarize them with the characteristics and benefits of energy efficiency lending products.
  • Enact legislation that establishes credit enhancements in the form of loan loss reserves and guarantees, or loan funds that can be leveraged to serve these purposes.
  • Establish measurement and verification as a mandatory standard for government program participation.
  • Make upgrades mandatory at the time of sale or transfer.

Technical Assistance

  • Standardize data collection programs and automated modeling tools.
  • Establish standard methods for energy efficiency information collection including data on financial, equipment, project, and building performance.
  • Document energy efficiency challenges and needs by market segment.
  • Estimate transaction costs and total project costs by financing mechanism.
  • Conduct education on existing standards such as the Building Energy Performance Assessment (BEPA).
  • Establish a document portal.

Earlier this week, Energy Manager Today reported that a paper “Energy Efficiency Financing Program Implementation Primer” found that banks and other lenders have the perception that lending to certain customer segments, including small business, represents too high a risk relative to the potential financial return.

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