SECO LoanStar Loan

Use it or lose it

A couple weeks ago I received an email from the Texas State Comptroller promoting the SECO LoanStar Program. A 100% financing for municipalities, public schools and hospitals to retrofit to energy efficient LED Lighting, solar and energy efficient HVAC technologies. This program is $7.5 million 1% rate with a 2% APR that is designed for the energy savings to pay back the financing. The ROI for LED Lighting is approximately two years and for solar it is six years. There is a lot of resistance to financing but there are good loans and bad loans. My father was a farmer and he was so tight that he squeaked and he explained to me “When I want to buy a piece of equipment like a tractor or combine, I have to make a decision ‘do I work and save to buy that piece of equipment cash or will inflation keep it just out of my reach? If that is the case I will finance that piece of equipment and put it to work to make more money to pay the loan off faster. You have to think of yourself as being in the egg business and your money is your chickens, you don’t want to eat your chickens”. This loan program requires registration by November 15^th then there has to be an evaluation by SECO and then a 120 days for the retrofit proposal to be submitted for approval. These time lines need to be meet or this financing goes away. For eight months I have read articles about a crisis of the lack of street lighting in the colonias. Then there are hundreds of miles of highway lights that are not lit. The TXDOT put up the poles and lights but left it up to the municipalities to maintain them. This cheap financing makes solving these challenges affordable. Loans have to be paid back but when you consider the arbitrage this pays for itself, at 1% interest the rate of the LoanStar loan and with the return on Investment is about two years for LED lighting and six years for solar power but the average savings with just LED lighting is 50%. This additional savings adds significant leverage. The payment calculation to pay off the loan via the savings. So with a two year ROI, keeping the payment the same, the cost is recuperated in two years. There is a commercial program Public Assessed Clean Energy financing for the commercial sector with the interest rate charged is 4% to 6% with a 20 year term. Using the rule of 72, the law of compound interest rather than just paying for these improvements out of the city coffers, leverage with the SECO LoanStar Loan invested with a PACE provider at 6% interest and if I knew the monthly payment I could figure out using compound interest the return via dollar cost averaging with the savings the financing would not only pay for itself but double in less than six years. This is why these public entities need to register for the LoanStar loan program.   

When cost isn't the limiting factor

Changing the whole focus

 

With the SECO LoanSTAR Loan program for municipalities, public schools and hospitals, the PACE Loan Program for commercial businesses, independent schools, hospitals and residential with five units or more. Then with the Byline Financial Group "Equipment Leasing" program taking the cost bearer down for those who only want to convert their lighting to LED lighting. When a business, school, hospital city or apartment can basically get their LED retrofit accomplished with nothing upfront and immediate saving every month, then the focus shifts from “How cheap can I get it?” to “I want the best!”. This is very different than how almost everyone thinks. So if cost wasn’t an issue, what would you want? Then energy efficiency, quality of light, less glare and capabilities, dimming, RGB color changing capabilities would be of greater emphasis. These are areas that most procurement officers don’t think about but when you have access to money specifically allocated to upgrading your lighting and it costs less to pay it back than you are paying currently it changes the whole focus. Now “If you could get it the highest quality lighting what would you want?” Energy efficiency is still a major factor because that would reduce the ROI, less glare and reduced maintenance would be a factor.

 

First things first, you have to be eligible, that means that cities, schools and hospitals need to get their paperwork in for the SECO LoanSTAR Loan Program. The deadline is November 15^th. Then for the SECO LoanSTAR loan program and the PACE Loan Program for commercial applications, businesses, private schools, hospitals residential up to five units have to inventory exactly what you want to replace and decide what you want to change to.

 

That’s what Valley LED Solutions can help you with. Finding quality products that maximize the energy savings, less glare and more capabilities.

How to get zero down and experience imediate savings with LED Lighting and Solar Energy

Okay here is the breakdown:


SECO LoanStar Loan- This is for Municipalities, Public Hospitals and Independent Schools. It is a 100% financing for labor and materials to retrofit to LED lighting, solar power and energy efficient HVAC projects up to $7.5 million with a 1% interest rate, 2% APR revolving loan. The deadline for enrollment is November 15th 2016.


 PACE Loan program- This is for commercial projects retrofitting to LED Lighting, Solar power and energy efficient HVAC technologies. Several banks bid on the projects offering 100% financing on labor and materials between 4% and 6% interest with terms 15 to 20 years on total financed amounts over $500,000.00. Equity is required. They will include previously purchased products retroactive up to one year.


HESALight- This is a manufacturer who 100% financing of the labor and materials with no minimum, 0% interest, credit, equity are required Only for HESALight products. 


Byline Financial- This program is a 1% with six months with no payment loan program for the retrofit to LED Lighting secured by the LED Lighting products. Available for commercial, public or privet hospitals, schools and municipalities.  No equity is required, not product specific, possible even for HESALight in the event the customer desires HESALight products and lacks the equity.

This is The Time

Don't eat your Chickens

 

My dad was a farmer and he was so tight that he squeaked but he taught me about leveraging money when he said “If I need to buy a piece of equipment like a tractor or a combine, I have to make a decision ‘Do I work and save to buy that piece of equipment cash or will inflation keep it just out of my reach? If that is the case I will finance that piece of equipment, put it to work to make more money faster and pay off that loan. You have to think of yourself as being in the egg business, you don’t want to eat your chickens. Your money is your chickens.”

When it comes to LED lighting it doesn’t matter how much you are going to save down the road. The cash out of pocket is what causes reluctance. But when you can show the business owner how they can experience immediate savings with nothing out of pocket and they experience the better quality light and lower maintenance costs they change from resisting to having to have it. There are programs for municipalities, schools and hospitals. There are other programs for commercial, residential more than five units, private hospitals and independent schools. There are manufactures with zero interest financing with no minimum amount and lenders with no collateral other than the lighting themselves. It all depends on the situation. We have access to all of these options. Contact us at Valley LED and we will see which options are best for you.

Let's make it a party!

It gets even better

My last post I promoted the SECO LoanStar Loan program for schools, municipalities and public hospitals. Then after shared my post I found out about the Public Assessed Clean Energy program PACE. This is for the private sector, businesses, privet schools and privet hospitals. I signed up for the training on the 18^th and I promoted it to over 50 electricians in the Rio Grande Valley. The PACE program has been available in Houston and Dallas for over a year, Willacy County and Cameron County for over a month and just a week and a half ago in Hidalgo county. I signed up for the training on the program this morning and after sending out emails promoting the training I received a call from the LRGVDC to tell me that there is only 35 seats available for this training. I want to fill the room with my referrals. If you are interested in retrofitting your business to LED and Solar got on the Registration Link: https://www.eventbrite.com/e/valley-pace-service-provider-training-august-18th-2016-tickets-26827835779. It costs about $79.00 for five hours of training and lunch. Give me a call if you have questions.