Frequently Asked Questions For Pace Financing

Why would I want to use Pace?
Assuming the upgrade is to happen, either cash or financing such as Pace, Loan, or Lease will be needed. All options have advantages and disadvantages. Cash is the easiest method. Loan or Lease is more widely understood, or for those that do not like adding to the Property Tax Assessment. The negative is that a Loan or Lease will often require a Personal Guaranty, significant due diligence, and possibly shorter terms. Pace requires significantly less due diligence, terms up to 20 years, can be paid off early if desired, and no Personal Guaranty since Pace uses collateral in the building as the security. You benefit from the increased cash flow.
I do not want a long term contract
The terms can be shortened to what is desired by property owner.
I want the low payment but not the long term contract
We can setup Pace with long term and low payments and then you can pay off the loan at your convenience. Note that there will be a small payoff fee for the early termination.
Pace seems hard to understand?
Pace can be simplified by realizing it is similar to any property tax assessment such as a street or sewer repair. The difference is the Pace does not have to be paid in full if building is sold unlike other assessments.
I do not like a Government program that puts taxpayers at risk
There is little or no government money at risk. The government provides a bond that they will forward the money to financial source when they receive it. They are under no obligation to pursue the receivable and if building is sold under foreclosure that they will collect the Pace payments to get the building current on its payment at the same time the government collects their past due balances.
Why would the government get involved even at this limited amount?
The government is continuously trying to create jobs in their community. Pace is an excellent way to create jobs without putting taxpayers at risk, and helps to stabilize building infrastructure, and eventually increase their tax base as the building increases in value. Also, buildings that do go into foreclosure will likely have increased marketability due to upgrades.
Why should I not wait to do the upgrade on my building?
Waiting is always an option. But, it is a more prudent business decision to do the upgrade now to offset what are becoming annual 4-7% utility rate increases. It also will likely increase your operating income; payments will likely be lower than the energy upgrade costs. You can also hedge against future government rules and mandates for cleaner energy facilities.
Does it make sense to do an upgrade to protect against future power outages?
A property owner would be prudent to encompass energy storage facilities along with the energy efficiency upgrades if at all possible to continue operating while a building is without power. An energy efficiency upgrade itself would not do anything to protect against outages. The financing can be arranged separately from an energy efficiency upgrade.
Who keeps the various rebates, tax credits, tax incentives?
The property owner keeps all the same benefits that they would retain in any energy efficiency upgrade package. This will typically be arranged by the contractor and Energy Pace Finance as an additional service to the property owner. .
Can I really finance lights, software, or other items that have no resell value on a long term contract?
As long as they are used to decrease your energy usage, Energy Pace Finance can accommodate the property owners need for -3-5-7-10-15-20 years with virtually no limitation within reason. Energy Pace Finance program can resolve most finance companies unease about financing upgrades that have little or no resell value.
My bank cannot finance without getting 10-20% down, how can Energy Pace Finance accept no money?
Different funding criteria. Banks have internal and external compliance issues that they must satisfy. Our program has greater flexibility while still keeping costs low.
How much upfront capital is needed?
Energy Pace Finance can provide 100% financing. It might only require up front a small $1-2,000 fee to cover any minimal expenses and which is fully refundable upon contract signing or built into the finance contract. All other costs are built into the contract.
I do not have any funds in the capital budget this year for energy upgrade?
Pace can easily accommodate the issue with the 100% financing capabilities.
I need to get a return on investment within a short time period?
The ROI can be infinitesimal since no capital required. Your payments will usually not exceed your current payment for the energy saved and in most cases will decrease your operating costs.
The tenant would benefit from energy upgrade but do not own the building.
A building owner would likely be incentivized to work with tenant since both gain-tenant in decreased operating expenses and tenant will appreciate the investment to control tenant costs, and the building owner increases the value of their building and lower their operating costs.
Will a Mortgage company accept an assessment on the building?
In most states, the mortgage company is not obligated to be informed. But, Energy Pace Finance works with the mortgage company to explain the financing mechanism and provide a Consent form. Mortgage companies understand that it saves the property owner money and the building has an increased value. Also, in the event of a default the Pace financing only receives payment on the unpaid payment thus the mortgage company is giving up a very small lien position. All the major banks such as Wells Fargo, US Bank, Bank of America, amongst many others have signed off on with their consent.
How much of our limited available man hours are required?
Energy Pace Finance will manage all the financing and will work with the energy company. Except for the unknown interruption by the energy company in the building during the upgrade, a few hours upon acceptance of working with Energy Pace Finance is normal.
The rates are higher than my current interest rates?
The rates themselves are low-4.75-7% which is generally close to what most company banks offer with the company banks having more security. These rates are similar to any transaction that rates are always higher if a long term finance contract, i.e. 10-20 years.
Can I really finance long term for essentially an unsecured asset?
The answer is yes and is a significant reason for using Energy Pace Finance since we are agnostic on what type of energy equipment is being used. In most cases, a lender will typically only be willing to go out 3-5-7 years with a balloon. Energy Pace Finance can finance as long as Twenty years.