As published in the August 1, 2012 Toledo Business Journal
Bill Bishilany
Ohio deputy treasurer and
director of economic development
A new source of financing for area businesses
Toledo Business Journal recently interviewed Ohio deputy treasurer and director of economic development, Bill Bishilany. He shared the following thoughts.
Toledo Business Journal: Can you describe the ReEnergize Ohio program and discuss its purpose?
Bill Bishilany: ReEnergize Ohio is a new economic development program that we initiated in the Treasurer’s office to offer a reduced rate on small business loans to help finance energy efficiency upgrades. The program encourages economic growth by helping small businesses improve their energy performance, and is a positive way to strategically invest a portion of the State’s portfolio in local economies. While the Treasurer’s office has other reduced rate loan programs for small businesses, and has historically offered rate reductions on energy efficiency improvements for homeowners, ReEnergize Ohio is the first energy efficiency improvement program officially targeting Ohio small businesses.
TBJ: Can you discuss the eligibility requirements for a business?
BB: In order to be eligible for ReEnergize Ohio, a small business must be headquartered and maintain offices and operating facilities exclusively in Ohio. A qualifying small business must have fewer than 150 employees, a majority of whom are Ohio residents.
TBJ: What is the maximum amount of loan funds that can be obtained and what is the repayment period?
BB: The ReEnergize Ohio program offers small businesses up to a 3% rate reduction on up to $550,000 of a new or existing loan for up to four years. If the loan rate is for more than four years, the interest rate will return to the normal borrowing rate agreed upon by the bank and the business at the end of the term.
TBJ: Can you explain the requirements concerning the use of these funds?
BB: Small businesses taking advantage of ReEnergize Ohio must commit to saving or creating jobs in Ohio. They also must use at least 50% of the loan proceeds for qualifying energy efficient upgrades. Eligible energy efficient upgrades span a wide array of products and renovations including but not limited to: lighting and system controls, heating and cooling systems, renewable energy systems, and weatherization projects. They can also be used for the purchase of energy efficient appliances, equipment, and vehicles. The other 50% can be used to finance other business expenses.
TBJ: Can you discuss benefits for participants including current federal programs?
BB: ReEnergize Ohio is a money-saving tool for small businesses looking to make energy efficient upgrades and improve their energy performance. The program can also help small businesses looking to consolidate debt, improve facilities, and lower overall interest expenses and monthly payments. This program is not mutually exclusive, and participants are encouraged to use ReEnergize Ohio in coordination with Small Business Administration loans and other State or federal programs or energy efficiency tax credits for which they may be eligible.
TBJ: Can you explain how this program works through participating banks?
BB: Small businesses apply for loans through participating banks, which make credit and eligibility decisions on the small business loan based on their own criteria. If approved, the Ohio Treasury deposits funds at the eligible bank in an interest bearing financial instrument. In turn, the bank uses the interest generated to provide an interest rate reduction on the small business loan. The Treasurer’s office receives the original investment back, with a slightly reduced return on investment. The State still earns interest on its money, while leveraging State resources to invest in local communities. This is not a grant program, and the Ohio Treasury does not loan money to either the bank or the borrower – the Treasury only invests money.
TBJ: Which banks are participating in Northwest Ohio?
BB: Any bank that is eligible to be a State depository of funds can participate in the ReEnergize Ohio program. There are dozens of banks across the state and in northwest Ohio that qualify to participate. More information is available on the ReEnergize Ohio website.
TBJ: Are there any other issues that you would like to address?
BB: ReEnergize Ohio is just one of the linked-deposit economic development programs currently offered by the Treasurer’s office. We also offer: the GrowNOW small business loan program (which is similar but does not require energy efficient upgrades), the ECO-Link program to help homeowners finance energy efficiency upgrades, the Ag-LINK program which offers reduced interest rates on start-up costs for Ohio farmers, and the Renew Ohio and Rebuild Ohio programs which provide reduced rates on loans related to damage due to severe weather.