Incentives OR financing?


Incentives or financing?

Which is best for you?

Utility incentives are great!  ..right?!
Yes… if you can front the full cost. And if you enjoy paperwork and have a solid grasp of the pitfalls of securing a good energy rebate from your utility.

0% lease option with $0 down?  Sounds too good to be true?

0% leases are available to some growers in exchange for the utility rebates offered for energy efficient equipment. It’s called an “assignment of funds” and happens all the time in other sectors. In some cases, a third party will even buy the lights for you, so you can pay for them over time with the extra cash you save from lower energy bills.  The energy rebate is a way to help buy down the cost of the loan, the collateral required and the lender risk.

Some things to consider:

  • Utility rebates are taxable income – do what you can to have them not come to you.
  • When looking at rebates consider the after-tax value of the rebate and your 280E tax structure.
  • Most lenders in the cannabis require large downpayment, high interest rates, and add considerable loan closing costs. Consider all of these costs when evaluating options.
  • If you’re buying energy savings equipment (for a premium price) work with lenders to align the monthly payments with the monthly savings.
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