4 Ways to Finance Your Sustainability Projects

February 11, 2019

Picture this: Joe owns and operates a popular taco shop. For years, he purchased single-use plates, cups, and cutlery for his dine-in and take-out customers alike.

Initially, these disposable items seemed inexpensive and convenient, but, more and more, Joe has realized that they have their downsides too. Namely, the build up of trash surrounding his taco shop.

The disposable foodware he distributes each day has become a noticeable source of litter on the streets and sidewalks encircling his business. There is no question, in Joe’s mind, that this practice—the lavish use of disposable foodware—has negative consequences for his business, his beloved community, and beyond.

Not only does his restaurant contribute to both landfills locally and ocean waste internationally, but, in addition, Joe is paying his waste hauler a lot of money, month after month, to “take care of” that overflowing dumpster behind his restaurant.

So, what can Joe do to improve his environmental footprint, profit margins, and customer loyalty?

It’s simple, really. Joe’s should implement the following measures:

  1. Replace all disposable foodware with durable reusables
  2. Replace old dishwashing equipment and pre-rinse spray nozzles with ENERGY STAR certified equipment
  3. Install bulk napkin and condiment dispensers and eliminate individual packets 
  4. Incentivize customers to bring their own containers

By taking these steps, Joe is convinced that he can reduce his waste flow by up to 30% and save thousands of dollars in annual waste hauler fees. But, given Joe’s current financial situation, the initial cost of those changes seems like an insurmountable hurdle.

What can Joe (and other business owners like him) do to phase in capital-intensive investments in equipment upgrades?

1. On-Bill Financing Programs

On-bill financing helps property owners pay for energy-efficient upgrades through their utility bill. It allows the utility to incur the initial cost of the upgrade, and the utility customer to repay that loan through their monthly utility bill.

On-bill programs have been made available by U.S. utilities for years. In fact, the four major utilities in California (San Diego Gas & Electric, SoCalGas, SoCal Edison, and Pacific Gas & Electric) all offer on-bill financing programs for commercial customers.

There are numerous factors to consider when borrowing funds, but here is a brief summary of the advantages associated with borrowing from your utility:

  • You already have a billing relationship with your utility, which means they have access to your energy usage patterns and payment history.
  • Many on-bill programs require “bill neutrality,” which stipulates that savings from the improvements in question must equal or exceed the monthly loan repayments.

Those two advantages of on-bill financing can open up doors for capital-constrained companies looking to capitalize on the many benefits of energy-efficiency. For a more complete picture of the opportunities and pitfalls associated with on-bill financing programs, please visit the U.S. Department of Energy or the National Resources Defense Council

2. California Hub for Energy Efficiency Financing (CHEEF) Pilot Programs

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), housed under the California State Treasure’s Office, provides financing solutions for businesses and households to facilitate the deployment of energy-efficiency equipment.

In 2019, CAEATFA is launching commercial energy-efficiency financing mechanisms targeted at small businesses and non-profits that meet one of the following requirements:

  1. Fewer than 100 employees
  2. Annual revenues of less than $15 million
  3. Meet SBA small business size-requirements

This Small Business loan program includes the following features and benefits:

  • Credit enhancement that allows lenders to offer attractive financing terms
  • Both building owners and building tenants are eligible
  • Broad list of energy efficiency projects qualify for financing
  • Flexible financing allows up to 30% of financed amount to fund non-energy efficiency improvements

According to GoGreen Financing, the public facing platform of CHEEF, qualifying projects must meet the following requirements:

“At least 70% of the credit-enhanced financed amount must be Energy Savings Measures or demand response. Up to 30% of the credit-enhanced financed amount may fund non-energy efficiency improvements. Financing for distributed generation (DG) improvements, like solar photovoltaic (PV), may be included, but this portion of the financing will not be credit-enhanced.”

For more information on CAEATFA’s Small Business Energy Efficiency Financing program, please visit the website of the California State Treasurer’s Office, GoGreen Financing, or contact Jonathan Verhoef at jverhoef@sto.ca.gov

3. Opportunity Fund Community Development

It is often the case that energy-efficiency financing mechanisms require that the price tag of the upgrade (to be funded) exceed $5,000. If you’re pursuing a less expensive upgrade, however, you may want to consider engaging a Community Development Financial Institution (CDFI).

One such institution is the Opportunity Fund. The Opportunity Fund is a nonprofit organization, based in California, that invests in small business owners and specializes in providing business loans as low as a couple thousand dollars to small businesses that might not qualify for loans from banks or other lending institutions.

They have provided business loans and financial advice to small business owners for over 25 years, and they are a founding member and signatory to the Small Business Borrower’s Bill of Rights. Their small business loans are easy to get, fast, and affordable.

Borrowers can use the loans to go green, free up cash flow, finance tenant improvements, and more.

Learn more by visiting the Opportunity Fund online, emailing Mayra Contreras as mayracontreras@opportunityfund.org or calling Mayra at (408) 784-8108.

4. The California Green Business Network

CAGBN is pleased to announce that this year will serve as a pilot launch for a rebate program of up to $500 per business to support environmental sustainability projects in the workplace.

More information on this program will be made available in the coming coming weeks. In the meantime, please feel free to work with your local Green Business Coordinator to find out more.


This blog post is made available by the California Green Business Network for educational purposes only, to provide general information and a broad understanding of the commercial loan options available, not to provide specific financial advice.

The California Green Business Network is a nonprofit focused on sustainability. We partner with local governments and utilities to help businesses meet and maintain an aggressive set of environmental standards. Once they are recognized, we promote Certified Green businesses throughout the State to connect them with conscientious consumers and raise the market visibility of our collective efforts around sustainability.