Financing FAQs
What is the HEFA Energy Conservation Financing Program?
HEFA's Value Lease program offers nonprofit institutions quick and easy access to low-cost, tax-exempt financing for energy-related projects. We can finance projects of approximately $500,000 and above (depending on the nature of the project).
Why should I finance an energy-related project through HEFA?
By financing an energy-related project through HEFA, you can take advantage of cost-saving, tax-exempt interest. Energy projects often pay for themselves with lower operating costs. In addition, interest rates you can get through HEFA can be 4 percentage points below vendor or bank financing, shortening pay-back periods and saving you a significant amount of money.
What equipment qualifies to be financed through HEFA?
Typical items might be new HVAC systems or retrofits; new boilers or boiler control improvements; new chillers or retrofits; replacement or conversion of air conditioning units; transformer replacements; even co-generation plants. We can finance items that other lenders might shy away from, such as lighting, windows, cooling towers, flushometer urinals, and occupancy sensors--almost anything energy-related.
How does the financing work?
HEFA will seek an investor who will lend you money by executing a capital lease. You hold title to the equipment financed and make scheduled payments. The investor will hold a first lien on the equipment as security until you complete the payments; then you will own the equipment outright.
How can this program help me in my capital budgeting process?
If you are faced with energy-related projects but have to phase them in over time due to budgetary constraints, or if you aren't sure what your borrowing needs will be from year to year, we can help. You can execute a Master Agreement with us and finance the first project, then come back to us as your needs dictate to finance an additional project using the same Master Agreement. This structure will help cut time, paperwork, and cost for you with new projects.
Can HEFA save me money even if I am already working with an Energy Services Company?
It does not matter which Energy Services Company you are working with; you can still save money by coming to HEFA for the financing. Simply separate the financing issue from the other project stages (i.e. development, implementation, monitoring and maintenance) and turn to us, preferably in the development stage, to determine whether our program can meet your needs.
I just paid for a new HVAC system. Can I still finance it through HEFA?
Internal Revenue Service regulations allow for a borrower to "look back" 60 days from the time its authorized governing body takes a vote allowing for the reimbursement of internal advances (your money spent) with the proceeds of a tax-exempt lease. So, if you paid the vendor on January 2, 1999, you have until March 2, 1999 to execute such a vote and be able to reimburse yourself. You may also be able to use tax-exempt lease proceeds to prepay taxable debt you incurred in connection with acquiring eligible energy-related equipment.
How can I get more information about Energy-related Financing?
Contact Marietta Joseph, HEFA's Deputy Director for Financing Programs
at 617.737.8377 or MJoseph@mhefa.org
