24 Sep Luna Capital Launches Use of SBA Green Loans to Grow New Mexico Businesses
When businesses have maxed out conventional SBA funding at $5.5MM, SBA Green 504 loans allow borrowers to finance energy efficiency costs into a second mortgage, giving them the ability to finance larger projects with minimum equity
FOR IMMEDIATE RELEASE: September 21, 2018, Santa Fe, New Mexico—Luna Capital, a Santa Fe-based brokerage and real estate firm with a specialty in brokering funding for craft brewing businesses, medical dental practices and tourism businesses announces it is now implementing SBA Green 504 loans, which allow businesses that have maxed out conventional SBA borrowing at $5.5 million to apply for a second loan that increases their borrowing ability to over $10 million by building, renovating or buying energy efficient buildings and using renewable energy.
“We are currently working on two SBA Green projects, both for clients that have maxed out their SBA borrowing and needed an efficient way to manage debt with minimal cash down,” said Luna CEO Kris Axtell. “Without the SBA Green program, conventional loan options would require borrowers to inject at least 25% cash equity, a difficult request for a growing business. One of our recent projects with Marble Brewery has come to fruition, with a significant cost savings that will be realized with the installation of their solar panels.”
“Marble is very excited to further its commitment to environmental sustainability with a soon-to-be installed 125 kW solar system at our flagship brewery located at 111 Marble Ave,” said Nate Tarantino, Marble Brewery CFO. “This system will result in annual electrical savings of 35% which provides critical cost savings that can be reinvested in the brewery for new capacity or capabilities. The project is being financed through the SBA 504 Green Loan program, which provides preferential terms for green projects. Navigating the strict criteria of this program is very time intensive; but by leveraging the expertise and resources at Luna Capital, Marble management’s time and mind share was freed up to continue the day-to-day oversight of our rapidly growing brewery. We thank Kris and the entire Luna Capital team for their assistance and look forward to more partnership opportunities in the future.”
Luna has brokered a combined $11 million in SBA Green projects and over $5 million in SBA funding to back these particular New Mexico projects.
The Energy Efficiency Public Policy Goal was approved as part of the American Recovery and Reinvestment Act of 2009 (ARRA). Per the SBA, only one Green project has been funded in New Mexico, in 2013 in the amount of $1,434,000.
WHAT IS A SBA GREEN LOAN?
- It allows for both larger SBA loans and multiple SBA loans to the same applicant.
- The Green 504 loan is a second mortgage that can be as much as $5.5 million, which makes transactions up to $12 to $20 million possible. Loans are available on a per project basis, meaning the regular SBA maximum eligibility limits at $5 million do not apply and larger businesses are able to utilize multiple 504 loans on multiple sites.
- The typical SBA 504 jobs creation and retention requirements do not apply, making larger loans for businesses with fewer employees possible.
- It also provides financing for both small and mid-size businesses to acquire, build or refinance energy efficient buildings. The larger loan sizes are more suitable to larger businesses and the recently expanded maximum tangible net worth and income requirements of $15 million and $5 million make it easier for larger businesses to qualify.
WHAT QUALIFIES AS GREEN?
- If the business leases or owns a building now and finances another building that will consume 10% less energy than the building than currently owned or leased.
- If the business leases a building, buys it and makes improvements to it that cut energy consumption by 10%. This could be as simple as a lighting retrofit using LED lighting since lighting typically accounts for 20 to 30% of a building’s energy use.
- If the company leases or owns a building now and builds a new facility that is 10% more energy efficient. Again, lighting is a great way to accomplish this, but there are numerous other means as well including better insulation, modular construction using structurally insulated panels, a better HVAC system, energy efficient windows, etc.
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About Luna Capital: Founded in Santa Fe, New Mexico in 2013, Luna Capital is a proactive and transparent commercial lending advisor providing capital resources and real estate expertise to businesses in the Southwest and nationally. Through careful analysis and planning, Luna becomes an invested long-term partner for their clients, engaging the business on every financial detail by building out customized plans that are then carefully overseen and guided. Luna is an exceptional creative force in an industry not known as such. Their thorough process and relationships with banks, SBA programs, private lenders, private equity and individual sponsors elevates their loan approval rate to nearly 100%. CEO Kris Axtell founded the company after a decade in the banking industry. He was joined by COO and Managing Member Brandon Fitzpatrick, an MAI trained appraiser and qualifying broker, in 2016. For more information about the Luna Capital team and services, visit: www.luna.capital.