Financing

COMMERCIAL FINANCINGEnergy Options works with lenders, lease brokers and private investors to offer a variety of financing options. Most financing has payments roughly equal to the energy savings so the cash flow is about the same as paying the electric bill. The table below displays the basic features of each type of commercial financial instrument. Presently SAFE-BIDCO is offering traditional financing at Prime minus 1%. The current rate on leases is about prime plus 1-½ %. Ask us for a quote.

FINANCIAL INSTRUMENT BENEFIT WHO’S RISK TERMS END OF TERM NOTES
Cash Simplest and lowest overall cost Buyer None Title is always in hands of buyer Tax benefits thus the size of the system is limited to the tax liability of the Buyer.
Traditional Loan Even cash flow Buyer 5 to 10 years Title is always in hands of buyer This is a company debt and affects debt ratios. Tax benefits go to the Buyer so size of system is limited to Buyer’s tax liability.
Traditional Lease Even cash flow and no debt Buyer 5 to 10 years Title is transferred to buyer at end of lease This is NOT a company debt and does NOT affect debt ratios. Tax benefits go to the Buyer so size of system is limited to Buyer’s tax liability.
Capitol Lease Even cash flow and no debt Buyer 10 years Buyer chooses to: purchase system at about 15% of original value or refinance or give it up. This is NOT a company debt and does NOT affect debt ratios. Tax benefits go to the Investors so size of system is unlimited.
Power Purchase Agreement Positive cash flow and no debt Investor 10 – 30  years Buyer chooses to: Renegotiate price of energy from system or Buyer can purchase system at a greatly reduced price or give it up. Buyer purchases energy, not equipment. The energy costs less than the utility supplied energy.
Special Financing for Used Wind Turbines Positive cash flow and no debt Buyer always gets a lower electric bill, but the loan term is longer if there are repairs. Seller is at some risk for a maintenance contract. Varies basedon performance of system Buyer gets title to system Payments are based on 10 – 30% lower cost of electricity. The term of the loan changes based on performance and maintenance.

RESIDENTIAL FINANCING For most residential purchases, the buyer can get a better rate with a second mortgage or money line of credit than Energy Options can, there are some 3rd party lenders that offer loans and use the equipment as collateral so that the customer’s FICA scores are not affected but these loans often require 3rd party insurance and the rate is 1 or 2 points higher than the current prime lending rate.

FINANTIAL INSTRUMENT MAINBENEFIT WHO’S RISK TERM END OF TERM NOTES
Cash Simplest and lowest overall cost Buyer none Title is always in hands of buyer Tax benefits thus the size of the system is limited to the tax liability of the Buyer.
Traditional Loan Even cash flow Buyer 5 to 10 years Title is always in hands of buyer This is a personal debt and affects debt ratios.
Traditional Lease Even cash flow and no debt Buyer 5 to 10 years Title is transferred to buyer at end of lease This is NOT a personal debt and does NOT affect debt ratios..
Power Purchase Agreement Positive cash flow and no debt Investor 10 – 30  years Buyer chooses to: Renegotiate price of energy from system or Buyer can purchase system at a greatly reduced price or give it up. Buyer purchases energy, not equipment. The energy costs less than the utility supplied energy.

In certain cases Energy Options will offer to finance the incentive, when the incentive payback it is a single payment and the installation time is short. In these situations, the Buyer only needs to pay the net cost of the system (gross cost minus incentive).