Why Off-Balance-Sheet Financing

Shared Energy Saving Performance Contract

As your business or organization considers the need for capital against the certainty of higher utility bills and operating costs for energy consumption, GreenCity Finance has an option that can put your green project "off" your balance sheet and allow your company to start enjoying energy efficiency savings now.  With newer, more efficient and reliable equipment that will pay for itself with energy savings, your company will avoid the risk of performance failure with no out-of-pocket costs.

Traditionally, companies finance energy efficiency projects in three ways; cash, loans, or leasing.  Cash is not an option if your company does not have the capital resources, or you prefer that available capital is used for other investments.  Loans may require a substantial down payment with higher interest rates, and depend on your organization's current debt load and credit worthiness.  Both these options need to be recorded on your company's balance sheet.

Some businesses and organizations currently use operating leases to cover up-front costs of energy efficiency retrofits or upgrades without having to record the value of the project as a new asset and long-term liability on their balance sheet.  New changes in accounting rules proposed in a recent exposure draft by the Financial Accounting Standards Board (FASB) would change how lease accounting is recognized.  Any contract that could be classified as a lease would need to be accounted for as a capital lease, and the resulting assets and liabilities recorded on the balance sheet of the lessee.  Scheduled to go into effect in 2011, this change in accounting rules makes off-balance-sheet financing an extremely important option in unlocking the economic and environmental benefits of energy efficiency retrofits.

After extensive research and analysis, with input from the accounting office of Katz Sapper & Miller, Ernst & Young of Indianapolis, and the FASB, GreenCity Finance strongly believes that our Eco Energy Shared Savings Plan and our proprietary Energy Service Agreement is classified as an off-balance-sheet transaction.  As a shared savings financing option, your company can enjoy the benefits of low-risk capital improvements that require no out-of-pocket expenses and will not appear on you balance sheet.

Call (317/453-7574) now or Contact GreenCity Finance today and make the right choice for you company's bottom line and the right choice for the environment.  For customers who prefer more traditional financing options, GreenCity can help your company as well.