Michigan expands low-interest energy loan program
By Saodat Asanova-Taylor
Local businesses looking to save on energy costs have an opportunity for low-interest loans through an expanded statewide energy financing program.
This initiative comes from Michigan Saves Inc., a nonprofit organization helping businesses to lower their expenses and improve their energy efficiency. The organization previously provided loan support to businesses around the Detroit area and is now extending their activities statewide.
Julie Metty Bennett, executive director of the organization, said the program provides low-interest loans for energy-efficient lighting, heating and cooling systems, insulation, refrigeration, equipment and more.
“A lot of the time, operation costs for businesses are much higher than they should be. We help them finance upfront costs and see cost savings,” she said.
The loan comes through Michigan Saves’s lending partners Ervin Leasing and capital provider Bank of Ann Arbor. The amount ranges from $2,000 to $150,000, with rates from 5.9 percent and terms from two to five years.
Additionally, special incentives of $2,000 are offered to businesses in the food industry that cut their energy consumption by 20 percent. They include restaurants, convenience and grocery stores and food wholesalers.
These businesses use energy intensively and typically don’t do any energy saving, Bennett said.
The interest rate on the loans for such companies is as low as 3.9 percent.
According to Bennett, any business with a good credit history is eligible to apply for the loan, and the process is quick and easy.
“We are working with authorized contractors in every county who can help to consult with businesses on what upgrades they need and the way to get the financing,” she said.
Michigan Saves is working with more than 45 contractors that provide energy efficiency management, roof and window installations and other services.
“We want more contractors to sign up for this program,” Bennett said.
Contractors must be licensed, and Michigan Saves closely monitors the quality of work, she said.
Meanwhile, the program has already shown success helping to save dollars for such businesses as Cass Café in Detroit
and Hiller’s Market, a family- owned chain of grocery stores in Southeast Michigan.
Eva Shapiro, chief financial officer for Hiller’s Market, said the company experienced high energy bills due to inefficient, aging equipment and lighting. With the loan, it was able to install energy-efficient refrigeration system controls and rooftop condenser units.
“It’s very expensive to replace equipment, and having financial assistance and support made it so much easier to make it happen,” Shapiro said.
The business benefited by almost $25,000 per year in savings and $11,000 in utility rebates.
In Traverse City, in addition to the Michigan’s Saves program, the local chamber of commerce has launched similar energy-efficiency projects.
Bill O’Brien, staff researcher and writer for the chamber, said his organization was approved for an additional $50,000 by Traverse City Board of Light and Power to loan to local businesses to save energy.
“These micro-loans help the companies install more energy-efficient equipment and reduce energy usage in the peak seasons, “ O’Brien said.
The micro-loan terms vary and will be for up to five years with an interest rate of 3 to 5 percent.
Michigan Saves also offers homeowners assistance for renewable energy improvements.