How to do multiple SBA loans and exceed the Max Loan Limits

By Nick Collins: Bank Five Nine

There is a common misconception associated with the SBA loan programs that Borrowers can only get up to $5 million in SBA financing. Albeit this rings mostly true with the SBA 7a program the SBA 504 program offers self-storage owners the opportunity to exceed that limit.

The SBA 504 “Green” program allows a business to secure multiple loans each with a maximum SBA portion of $5.5 million and an aggregate that isn’t over $16.5 million. Larger projects can be funded depending on the bank handling the non-SBA portion of the 504 structure.

One of the following three goals must be met to qualify:

1) Projects for the reduction of existing energy consumption by at least 10%. This category may not be used for Projects involving new businesses. In addition, if this project involves:

a) The construction or acquisition of a facility:

i) The new facility must replace an existing facility.

ii) The energy consumption at the existing facility must be compared with the new facility, and the Applicant must be able to demonstrate that the new facility will use 10% less energy than the existing facility. The energy consumption between the two facilities must be compared for energy consumption on a square footage basis.

iii) The new facility must be located in the same local area (e.g. the same city, town, county, zip code, metropolitan statistical area or as otherwise deemed appropriate by SBA).

b) The retrofit of an Applicant’s existing facility, the retrofit must reduce the energy consumption of that facility by at least 10%, regardless of the energy usage of any other facilities that the Applicant may operate; or

2) Renewable energy sources that generate more than 15% of energy used at Project Facility.

a) This category includes plant, equipment, and process upgrades of renewable energy sources such as the small-scale production of energy for individual buildings or communities’ consumption, commonly known as micropower, or renewable fuel producers including biodiesel and ethanol producers.

b) Each Project must generate more than 15% of the energy used by the Applicant at the Project facility. In addition, all improvements or equipment required to generate the renewable energy or renewable fuels must be included in the 504 Project costs; or

3) Increased use of sustainable designs. Increased use of sustainable designs, including designs that reduce the use of greenhouse gas emitting fossil fuels or low-impact design to produce buildings that reduce the use of non-renewable resources and minimize environmental impact.

4) With respect to paragraphs ii. and iii. above, the Applicant must document the Energy Public Policy Project’s compliance through either an energy audit, engineering report, or other professional evaluation, as deemed appropriate by SBA, that is based on the annual energy usage at the facility or facilities (measured in actual energy usage, e.g. kilowatt hours, therms, or gallons, as applicable, not in dollar costs), and that, at a minimum, includes the following:

a) A description of the facility or facilities;

b) The current energy usage;

c) The projected energy usage, which must be based on all modifications and retrofits to building(s), and all installations of, and replacements and retrofits to, equipment; and

d) The qualifications of the party performing the energy audit, engineering report, or other professional evaluation, each of which must be performed by an independent third party (by an entity other than the Applicant, the interim lender, the Third Party Lender, or any of their respective affiliates).

For more information please contact


 Nick Collins

Commercial Lender - Vice President

Bank Five-Nine

155 W. Wisconsin Avenue | Oconomowoc, WI 53066

p: (262) 560-2016c: (262) 468-6169f: (262) 804-9926