BOSTON, July 22, 2024 (GLOBE NEWSWIRE) -- Today, Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s Cabinet for America’s more than 33 million small businesses, announced a new Green Lender Initiative to enroll additional climate lenders in SBA’s loan programs. The initiative will employ SBA loan guarantees to attract additional private capital in support of clean energy investments spurred by President Biden’s Inflation Reduction Act.

Administrator Guzman also announced that the SBA will expand Community Advantage (CA), the mission-driven component of the 7(a) Loan Program, by increasing the maximum loan amount and allowable geographic areas for CA lending, with particular flexibility for climate-focused projects. She announced the changes with U.S. Senator Ed Markey (D-MA) while visiting Indigo Block, a low-income, multifamily housing powered by new rooftop solar panels installed by Boston-based small business Resonant Energy.

“The Biden-Harris Administration’s transformative Invest in America agenda is powering our economy’s transition to a clean energy future, and that includes supporting our small businesses as they do their part to help America meet the President’s ambitious and necessary climate goals,” said Administrator Guzman. “Small businesses and homes account for more than one-third of U.S. emissions, so it is vital that they are part of the solution. The SBA’s new Green Lender Initiative aligns private capital with investments in America so that more mission-driven climate lenders can leverage the SBA federal loan guarantee programs to fund the small business clean energy transition.”

“President Biden’s Investing in America agenda is delivering transformational investments in climate and clean technologies,” said EPA Administrator Michael S. Regan. “We are thrilled that the climate lenders and other entities that will be leading much of this work on the ground will have access to a new resource from SBA to assist them. The Green Lending Initiative will help advance EPA’s and SBA’s shared goals of ensuring that communities and small businesses have access to the capital they need to support and benefit from a cleaner and more sustainable economy.”

“Today’s announcement by the Small Business Administration is a win for the clean energy economy and the climate. By teaming up with the Environmental Protection Agency and green energy lenders, SBA will leverage historic capital investments from the Inflation Reduction Act— including the $20 billion in national climate bank funding that I secured—to support financing for clean energy projects and sustainable small businesses,” said Senator Markey. “This will supercharge our energy transition in cities and towns across the Commonwealth while creating good high-wage clean jobs, putting small business owners in the driver’s seat.”

“President Biden’s economic agenda has driven a small business and clean energy boom in communities across the country,” said White House National Economic Advisor Lael Brainard. “The Small Business Administration’s new Green Lender Initiative will expand access to climate capital for the small businesses that power America’s economy, while lowering energy costs for Americans and ensuring that all communities share in the benefits of the clean energy future.”

“Under President Biden’s leadership, we are helping small businesses reduce their energy costs and emissions while empowering them to participate in the booming clean energy economy. SBA’s innovative Green Lender Initiative will support climate lending for small businesses – which are the backbone of the American economy – and incentivize more small business ventures to contribute to decarbonizing our economy and lowering energy costs for American families,” said National Climate Advisor Ali Zaidi.

“SBA loans have been assisting small businesses and the lenders who support them for decades,” said Katie Frost, Associate Administrator for SBA’s Office of Capital Access. “The SBA is excited to welcome green banks and similar institutions into SBA lending, to capitalize on these benefits and broaden their support to more American small businesses.”

"OFN is excited to see SBA launch a program to help community lenders leverage the historic funding of the Greenhouse Gas Reduction Fund (GGRF) in innovative ways," said Harold Pettigrew, Jr., President and CEO of Opportunity Finance Network, an awardee of the Clean Communities Investment Accelerator under GGRF. "This green lending initiative – which increases maximum loan amounts and expands geographic service areas – will help mission-driven community lenders working to tackle the climate crisis reach more small businesses. We thank SBA for their continued partnership and recognition of the role CDFIs play in the transition to a green economy."

This initiative will leverage SBA’s loan guarantees, secondary market, and other services to scale lending to Main Street small businesses working to decarbonize and lower energy costs for American homes and businesses. SBA loans offer competitive terms and usually offer lower down payments, longer maturities, flexible overhead requirements, and no collateral needed for some loans.

The Inflation Reduction Act has already unlocked historic levels of private sector investment in clean energy and continues to combat the climate crisis. Under Administrator Guzman, the SBA is doubling down on ensuring that small businesses and community lenders can participate in this growing sector of the economy. In the coming months, hundreds of locally, regionally, and nationally focused financial institutions will begin deploying billions in public capital alongside billions in private investment as part of Inflation Reduction Act programs like the Greenhouse Gas Reduction Fund at EPA. These mission-driven lenders are uniquely positioned to identify and carry out climate investments on an equitable basis, ensuring that underserved communities can share in the energy cost savings and productivity improvements of the clean energy transition.

The SBA’s new Green Lender opportunities span from hyperlocal microlenders to nationally oriented financial institutions. Specifically, an organization may access SBA support via:

1. The Microloan Program, as a Microlender: The SBA makes funds available to SBA microlenders, who provide small businesses with small, short-term loans — up to $50,000 — for working capital and other uses. The SBA accepts applications to become a microlender on a rolling basis.
2. The 504 Loan Program, as a Certified Development Company (CDC): The SBA oversees 208 CDCs, which are nonprofits focused on the economic development of their communities that work with SBA and private-sector lenders to provide small businesses with long-term, fixed-rate financing for major fixed assets, such as land, buildings, machinery, and equipment, up to $5.5 million. Clean energy and energy efficiency investments are now eligible for multiple 504 loans. The SBA accepts applications to become a CDC on a rolling basis.
3. The 7(a) Loan Program, through a Community Advantage Small Business Lending Company (CA SBLC) license: To date, the SBA has 142 enrolled CA SBLCs, which are mission-driven, non-depository lenders supervised by SBA. In the coming weeks, the SBA will begin accepting new applications for CA SBLCs and authorize them to make larger loans of up to $500,000—or $2 million to finance climate-related projects. Information on applying for a CA SBLC license will be available shortly in the Federal Register.
4. The 7(a) Loan Program, through a traditional Small Business Lending Company (SBLC) license: SBA oversees 16 SBLCs, which are non-depository institutions that make SBA loans nationwide up to $5 million. Information on applying for an SBLC license will be available shortly in the Federal Register. SBA will consider an applicant’s ability to fill market gaps in clean energy financing, in addition to market gaps in lending to underserved communities and underrepresented entrepreneurs.

To learn more about accessing the SBA’s Green Lender opportunities, see online information about becoming an SBA lender, contact your local SBA District Office (find your district office here).

In addition to strengthening the network of SBA lenders, the SBA is expanding the loan size and geographic reach of its 7(a) mission-driven lending through the Community Advantage Small Business Lending Company (CA SBLC) license. Currently, CA SBLCs can lend up to $350,000 and only in specifical geographic areas. Administrator Guzman announced the expansion of the CA SBLC loan max up to $500,000 for active lenders, and the opening of an application process for lenders to expand up to $1,000,000 generally or $2,000,000 for climate projects. The SBA will also open an application process for CA SBLCs to expand their geographic reach.

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About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.

Christine Saah Nazer
U.S. Small Business Administration
202-756-0304
Christine.Saahnazer@sba.gov