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Program Information for Lenders

Financing Program Information for Lenders

What is Small Commercial Energy Efficiency Financing?

NYSERDA works with lenders [PDF]. statewide to offer two low-interest energy efficiency financing options to help small businesses and not-for-profits access the capital they need to make energy efficiency improvements in their buildings. Below you will find information about both loan products and how to work with NYSERDA to offer low-interest energy efficiency financing to your small business and not-for-profit customers.

Participation Loan

On-Bill Recovery Loan

How it Works

Lenders partner with NYSERDA on an energy efficiency loan. NYSERDA finances 50% of the loan principal, up to $50,000 at 2% interest, and the lender finances the remaining loan principle at market rate.

How it Works

Lenders follow NYSERDA’s underwriting criteria to originate a NYSERDA loan of up to $50,000.

Loan Amount

Lenders can offer energy efficiency loans of up to $100,000 or more.

Loan Amount

Maximum energy efficiency loan amount is $50,000.

Interest Rate

NYSERDA’s share of the loan is financed at 2% interest. The lender determines the interest rate it will charge for its share of the loan based on the lender’s underwriting criteria.

Borrower’s can expect to obtain financing at a reduced interest rate by participating in the program.

Interest Rate

2.5% (subject to change).

Fees

Determined by lender.

Fees

Lenders may charge a processing fee.

Borrowers may be subject to fees from NYSERDA and/or their utility service provider for late payment.

Loan Term

Determined by the lender, but not to exceed 10 years.

Loan Term

NYSERDA sets a minimum loan term for each loan to ensure the customer has a positive cash flow. This minimum term can be found in the NYSERDA-approved Request for Financing Package.

The lender may set a loan term that is ≥ the minimum loan term identified in the package but is ≤ 10 years.

Agreements

Borrower will sign loan agreements provided by the lender.

Agreements

Borrower will sign and have notarized a Note [PDF]and an On-Bill Recovery Program Declaration [PDF]. If the borrower is not the owner of the property, the owner must sign and have the Declaration notarized.

Lending Criteria

Lenders will issue loans to borrowers based on the lender’s standard underwriting criteria.

Lending Criteria

Lenders will follow NYSERDA’s underwriting criteria when originating NYSERDA loans.

Criteria* include but are not limited to:

  • Organization in existence at least 2 years
  • Credit score of 650 or higher
  • No bankruptcies within the last 5 years
  • No current judgments or liens in excess of $5,000
  • Debt service coverage ratio > 1.2
*These criteria are subject to change.

Borrower Eligibility

Borrowers with NYSERDA-approved Request for Financing Packages are eligible to apply for financing.

The lender will decide whether or not to issue a loan to the borrower based on the lender’s standard underwriting criteria.

Borrower Eligibility

Borrowers with NYSERDA-approved Request for Financing Packages are eligible to apply for financing.

The lender must follow NYSERDA’s underwriting criteria when issuing On-Bill Recovery loans. Only borrowers that meet or exceed NYSERDA underwriting criteria will be eligible for an On-Bill Recovery Loan.

The lender must also require all individuals or legal entity representatives named on the property deed to sign and notarize the On-Bill Recovery Declaration [PDF] before closing on an On-Bill Recovery Loan with a borrower. The Declaration provides notice of the obligations under the loan to any subsequent purchaser of the property.

Repayment Terms

  • The borrower will make loan payments to the lender pursuant to the loan terms.
  • The lender’s loan document will identify any security required for the loan, any requirements for satisfaction of the loan upon sale or transfer of the property, and the lender’s remedies for nonpayment of the loan payments.
  • NYSERDA’s Master Loan Servicer will provide the lender with instructions for repaying NYSERDA’s pro rata share of the loan.

Repayment Terms

Borrowers repay the loan through loan installment charges on their utility bills.

Participation Loan 

On-Bill Recovery Loan 
Last Updated: 09/08/2014