Do you understand how energy efficient upgrades could help your business but don’t have the capital to do so? Building Upgrade Finance is a finance product or loan that building owners can access to improve the energy, water or environmental efficiency or sustainability of existing non-residential buildings. The loan is available to all industries, be that commercial, industrial, agricultural and so on, and is also available for the restoration and upgrades of heritage buildings.
How it differs from traditional finance or energy efficiency finance is that repayments are collected via the council rates collection process. In this way, the loan is secured by the land rather than the building owner. With this level of security, financiers are able to offer more attractive loan terms.
What works can be funded?
Any works that improve the energy, water or environmental efficiency or sustainability of a building. Such works include (but are not limited to):
- energy efficient lighting
- air conditioning
- mechanical upgrades
- double glazing
- renewable energy
Heritage building upgrades can include conservation works and access or building compliance improvements in addition to environmental upgrades.
Scott Hicks from Your DC explains his experience with Building Upgrade Finance.
“This upgrade is cash flow positive from day one, it was an absolute no brainer for us. Data centres are one of the highest consumers of power per square metre and sustainability is very important to us. It means that when the sun is shining our customers’ computers are running on solar.”
Why did Your DC choose Building Upgrade Finance over other finance options?
- It enabled access to a 10-year loan – the reduced energy costs and longer-term loan allowed maintenance of cash flow
- 100% project finance – no impact on capital budget
- Other finance options offered only 4 to 5-year term, therefore impacting cash flow
Other advantages offered by Building Upgrade Finance include the option to share upgrade costs with tenants (if no worse off) and the ability to pass the remaining repayments onto a new owner on sale of the property (by agreement).
- You must own the building (tenants, talk to your landlords!).
- The building must be non-residential and at least two years of age.
- The building must be within a SA council offering Building Upgrade Finance.
Currently, councils offering Building Upgrade Finance include City of Adelaide, City of Salisbury, City of Onkaparinga, and City of Marion. Town of Gawler and City of Playford will be offering Building Upgrade Finance from 1 July 2019 and other councils are in the process of reviewing Building Upgrade Finance as an offering. If your council does not currently offer Building Upgrade Finance, you can register your interest with the Building Upgrade Finance Central Facilitator, who will encourage their involvement.
If you would like more information contact:
Building Upgrade Finance Central Facilitator for South Australia