The Small Business Administration (SBA) is aiming to attract lenders to support small businesses in their clean energy endeavors. Rather than providing loans directly, the SBA collaborates with lenders to extend loans to small businesses at favorable interest rates compared to conventional loans.
The SBA is seeking to engage a variety of lenders, from local microlenders to nationally operating financial institutions. Lenders have the opportunity to apply for different programs such as becoming a microlender offering loans up to $50,000, a Certified Development Company focused on community economic development, or a Community Advantage Small Business Lending Company (CA SBLC) concentrating on projects with a mission-driven approach.
New applications for CA SBLCs will soon be open for submission. The SBA is raising the loan cap for active CA SBLCs from $350,000 to $500,000. Additionally, a new application process is being introduced where CA SBLCs can request authorization to provide larger loans, up to $2 million, to finance projects related to climate sustainability.
Isabel Guzman, the SBA Administrator, emphasized the importance of small businesses and households in contributing to U.S. emissions and highlighted the significance of their participation in addressing the climate crisis. Guzman stated that the initiative would enable more climate-focused lenders to utilize SBA federal loan guarantee programs for supporting the shift towards clean energy solutions.
