Doing the right thing can sometimes cost a lot up-front. And coming up with that initial money to purchase equipment that meets or exceeds environmental regulatory obligations can be a huge barrier. Getting a small business loan from the MPCA can help bridge that gap.
When it involved saving energy and managing less hazardous waste, Dan Tollefson, owner of Schwegman’s Cleaners in Willmar thought it time to make an investment. Tollefson wanted to get away from the controversial issues that follow percholoroethylene (perc) and move to a higher performing product.
Tollefson recently applied for a small business loan to replace an old perc machine with a new hydrocarbon dry-cleaning machine. The new machine cost $58,800, but he will save at least $6,000 per year. The new machine will also eliminate the need for $4,500 of perc every year (78 gallons), reducing expenses for hazardous waste disposal fees. Because the equipment is energy-efficient, energy bills will also be reduced.
More about small business loans
Many businesses are eligible and can benefit from using a small business loan to change processes or equipment. For example, auto body shops are switching from solvent to water-based coating systems. For fleet vehicles that are older than 2007, idling emissions can be reduced with new idling technologies (http://www.epa.gov/smartway/foarpartners/technology.htm). For other companies, financial assistance can help with investigating or cleaning up contaminated sites.
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 and a net worth of less than $1 million.
- demonstrate an ability to repay the loan.
The types of projects that qualify need to involve pre-approved capital equipment purchases that meet or exceed environmental rules and regulations, or pre-approved site investigations and cleanups. Projects begun or completed prior to MPCA approval are not eligible. Loans are awarded on a competitive basis year-round and are based on available funds. It typically takes a minimum of 45 days to complete the process once a loan is awarded.
The general terms:
- loan amount not less than $1,000 or more than $50,000.
- an interest rate of 4% or one-half the prime rate, whichever is greater at the time of award.
- repayment term of not more than seven years for environmental improvements, collateral is required.
- borrowers must complete an evaluation of the project's realized environmental and economic benefits.
Check out MPCA's small business environmental improvement loans page.