Environmental projects can have a significant financial impact on small businesses. Even if projects save money long term, securing affordable funding now can be a barrier to making environmental changes.
The Small Business Environmental Loan Program provides low-interest loans to small businesses for capital equipment purchases that meet or exceed environmental regulations, and costs associated with the investigation and cleanup of contaminated sites. Common benefits include a healthier workplace, lower waste disposal bills, and reduced regulatory obligations. Projects that go beyond compliance may result in simpler permits and/or cost savings.
Eligibility and conditions
Many business types are eligible, but there are restrictions on business size. A borrower must:
- be an existing small business corporation, sole proprietorship, partnership or association.
- have less than 50 full-time employees.
- have an after-tax profit of less than $500,000.
- have a net worth of less than $1 million.
- demonstrated ability to repay the loan.
- a loan amount between $1,000 and $50,000;
- an interest rate of 4% or one-half the prime rate, whichever is greater at the time the loan is awarded;
- a repayment term up to seven years;
- flexibility in the types of collateral accepted;
- loans awarded throughout the year.
Application and evaluation
The application process is rolling, with loans made throughout the year. Applications are evaluated based on the applicant's ability to secure and repay the loan, and the project's expected environmental benefits. All project costs must be pre-approved and cannot be incurred until the application process is complete. Borrowers must report on the project's realized environmental and economic benefits.
A screening committee composed of financial and environmental professionals evaluates each application. Priority projects will be given special consideration. Program priority areas include breweries, gas stations, printers, water use reduction projects, and projects that reduce regulatory obligations.
How to apply: SBEAP Loan Program Application for Credit (p-f2-72)
For more information, or to request an application, contact the MPCA's Small Business Environmental Assistance Program:
Minnesota Pollution Control Agency
520 Lafayette Road N.
St. Paul, MN 55155
651-757-2218 or 800-657-3938
Dan Tollefson, owner of Schwegman’s Cleaners (Willmar) used a small business loan to replace an old perc machine with a new hydrocarbon dry-cleaning machine. His investment will save $6,000 per year.
Long-haul trucker Paul Ahles installed a new auxiliary power unit to provide heating/cooling and electricity without having to idle the truck's big engine. Ahles' investment saves him an estimated $500 per month!