I run an energy, clean-tech or environmental business or project. What are my options?
USDA REAP and SBIR awards, SBA 504 energy loans, equipment finance, impact funds and project equity, cheapest first.
Money for energy and environmental work falls into three broad tracks depending on what you are doing: cutting energy bills or installing renewable energy at your own business, developing a new clean technology, or building a larger renewable or community project.
- USDA's Rural Energy for America Program (REAP): for agricultural producers and small businesses in rural areas of 50,000 people or fewer, REAP offers guaranteed loans and competitive grants for renewable energy systems and energy efficiency improvements. Under USDA's rule in force from October 16, 2026, REAP grants (up to $500,000 for renewable energy and $250,000 for energy efficiency, and at most 25% of project cost) are applied for 12 to 24 months after you build the project, backed by 12 months of energy data from before and 12 months from after; on October 20, 2026, REAP loan guarantees were open while grant applications were not. Ground-mounted solar and wind systems on cropland, and solar or wind systems with parts from designated foreign adversaries (unless installed before October 1, 2026), are ineligible.
- Higher SBA 504 limit for energy projects: on an SBA 504 loan for buildings and long-life equipment, the SBA-guaranteed debenture can reach $5.5 million (instead of the usual $5 million) for eligible energy public policy projects, and the job goal is one job created or kept per $150,000 guaranteed rather than $95,000.
- Developing new clean technology: if you are researching and testing new energy, materials or environmental technology, check SBIR and STTR research awards (the Department of Energy, EPA, USDA and NSF are all participating agencies) and the federal R&D tax credit, alongside angel and venture capital.
- Mission-driven and community capital: private foundations can make below-market program-related investments (PRIs) for environmental and charitable purposes under 26 CFR 53.4944-3, and community development financial institutions (CDFIs), co-ops and community offerings can fund local projects.
24 routes to look at, cheapest first
Compare the first 4 side by side- L0
Free or nearly free
Little or no cash cost, though most take time and admin. Some bring money in, and a few have small fees.- Grants, tax credits and prizes
Business tax breaks (section 179, bonus depreciation and credits)
Federal tax rules that let you deduct the cost of equipment in the year you buy it, and credits for things like offering staff health insurance. They cut the tax you owe, so they help only if the business has taxable profit or tax to pay, and they come after you have spent the money.
6 months or more - Grants, tax credits and prizes
Research and development tax credit
A federal tax credit for qualifying research spending. Young companies with little or no income tax to pay can use up to $500,000 a year of it against their payroll taxes instead.
Months - Grants, tax credits and prizes
SBIR and STTR research awards
Federal research and development funding for small US businesses, won in competitions run by 11 federal agencies. Nothing to repay and no ownership given up, but your project must match an agency's published topic.
MonthsUp to $2.2m - Grants, tax credits and prizes
State and local grants
Money from a state, county or city that you do not repay, usually tied to creating jobs, investing in a place or a set purpose. Rare, competitive and slow, and the field is full of "free government grant" scams.
6 months or more - Grants, tax credits and prizes
USDA grants for rural businesses and farmers
Competitive USDA Rural Development grants that pay part of a project's cost: the Rural Energy for America Program (REAP) for renewable energy and energy savings at rural small businesses and farms, and Value-Added Producer Grants for farmers turning their crops or livestock into new products. Neither was open to new grant applications on October 20, 2026.
6 months or moreUp to $500k - Crowdfunding and community finance
Rewards crowdfunding
Raise money online from many backers who get a reward, often the product itself, instead of a share of the business. No repayment or dilution, but you must deliver what you promised, and the money is usually taxable income.
Months
- Grants, tax credits and prizes
- L1
Very cheap or subsidised
Borrowing on better terms than the market, usually because a public body, community lender or large buyer is involved.- Government-backed and community lending
Community development lenders (CDFIs)
Loans from community development financial institutions: mission-driven lenders certified by the US Treasury that serve low-income communities and people who find it hard to get finance elsewhere, often with advice alongside.
WeeksPersonal guarantee likely - Government-backed and community lending
Industrial revenue bonds (small issue bonds)
A state or local issuer sells tax-exempt bonds and lends the money to a manufacturer for a new plant or equipment. Bond buyers pay no federal tax on the interest, so the rate can be lower than a bank loan, but only for manufacturing projects of up to $10 million, and with public approval, legal work and fees.
6 months or moreUp to $10mPersonal guarantee likely - Government-backed and community lending
New Markets Tax Credit financing
Loans or investments on better terms than the market, from a Community Development Entity that has federal tax credits to offer its investors, for businesses and buildings in low-income communities. Flexible and cheap, but scarce, slow and complex, so it suits larger projects.
6 months or moreLoans, or shares if you choose - Government-backed and community lending
Program-related investments and impact funds
Loans, guarantees or investments from private foundations and other mission-driven funds, made to further a charitable purpose rather than for profit, often below market rates. Cheap and patient money, but only when your business does something the funder's mission is about.
MonthsLoans, or shares if you choose - Government-backed and community lending
SBA 504 loans
Long-term, fixed-rate financing for buildings, land and long-life equipment, split between a bank and a nonprofit Certified Development Company backed by the SBA. You usually put in 10% yourself.
MonthsUp to $5.5mPersonal guarantee likely - Government-backed and community lending
SBA Microloans
A small business loan of up to $50,000 from a nonprofit community lender that the SBA funds, for working capital, supplies and equipment. The average is about $13,000.
WeeksUp to $50kPersonal guarantee likely
- Government-backed and community lending
- L2
Mainstream secured debt
Standard borrowing from banks, credit unions and mainstream lenders, often secured on assets or backed by a personal guarantee.- Government-backed and community lending
SBA 7(a) loans
A business loan of up to $5 million from a bank or other lender, with part of it guaranteed by the SBA, for businesses that cannot get the credit they need on reasonable terms elsewhere.
MonthsUp to $5mPersonal guarantee likely - Government-backed and community lending
SBA Express loans
A loan or line of credit of up to $500,000 from a bank or other lender with SBA Express authority. The lender decides under its own procedures and the SBA guarantees half, so there is less SBA paperwork than a standard 7(a) loan, but the same rate caps and the same rules on who can borrow.
WeeksUp to $500kPersonal guarantee likely - Government-backed and community lending
State small business capital programs (SSBCI)
Loans and investments that a state, territory or Tribal government helps a bank or fund make, using federal SSBCI money: it buys part of the loan, guarantees it, puts up cash collateral or insures it. You apply to the bank or fund, and what is on offer differs from state to state.
MonthsUp to $20mLoans, or shares if you choosePersonal guarantee likely - Government-backed and community lending
USDA Business and Industry loan guarantees
A loan from a bank or other lender, with up to 85% guaranteed by USDA Rural Development, for businesses, cooperatives and others whose project is in a rural area. Up to $25 million, for up to 40 years, for buildings, equipment, buying a business and more.
MonthsUp to $25m - Bank and mainstream debt
Bank and credit union term loans
A lump sum from a bank or credit union, repaid in fixed installments over an agreed term, usually one to five years. Usually cheaper than online lenders, but slower, and usually secured on assets with a personal guarantee.
WeeksPersonal guarantee likely - Bank and mainstream debt
Commercial real estate loans
A loan secured on business property, to buy, build or refinance the building you trade from or one you rent out. Long-term money at a lower risk to the lender than most business loans, but you need a deposit, and many loans end with a large final payment you must refinance.
Months - Bank and mainstream debt
Equipment leasing and sale-leaseback
Paying to use equipment that a lessor owns, with options to buy it at the end, or selling equipment you already own to a lessor and leasing it back to raise cash. Little or no deposit, but you may pay more in total and own nothing at the end.
Weeks - Bank and mainstream debt
Equipment loans and finance agreements
A loan or finance agreement to buy machinery, vehicles or other equipment now and pay for it over time. The equipment itself usually secures the deal, and tax rules can let you write off much of the cost in the first year.
Weeks
- Government-backed and community lending
- Equity rungs. These routes cost no interest, but you give up part of the ownership and control of your business. They are ranked by how much you give up, not by a made-up interest rate. Over time, equity can be the most expensive money of all.E1
Light dilution
You sell a small share of the company, usually to many small investors or people you know, and keep control of how it is run.- Crowdfunding and community finance
Co-op member shares and community offerings
A cooperative raising money from its own members, through membership shares, other shares or member loans, under state cooperative and securities law. Other community businesses can make small public offerings registered with their state.
MonthsGives up shares - Crowdfunding and community finance
Intrastate offerings and state crowdfunding
Selling shares or notes only to people who live in your own state, under the federal intrastate exemptions and your state's securities law. Some states have their own crowdfunding exemptions with low limits per investor, which let local customers and neighbors invest small amounts.
MonthsGives up shares - Crowdfunding and community finance
Regulation Crowdfunding
Raise up to $5 million in 12 months from the public, including people who are not wealthy investors, by selling shares, debt or other securities through one SEC-registered online platform.
MonthsUp to $5mLoans, or shares if you choose
- Crowdfunding and community finance
- E2
Significant dilution and investor rights
Investors take a meaningful stake and usually get rights such as a board seat, a veto over big decisions, or a preferred return.
Worth knowing
- Do not build a project budget around a grant round that has not opened yet; under the October 2026 REAP rule, you must pay for and run a rural energy project for at least a year before applying for a REAP grant.
- For an energy-efficiency project, record at least 12 months of baseline energy bills and get an energy audit or assessment before you start work.
- Standard solar panels, heat pumps, LED lighting, refrigeration and battery systems with predictable savings can often be funded with an equipment loan or lease, an SBA 504 loan or a bank term loan without giving up equity.
- Ask your tax preparer before buying equipment how section 179 expensing, 100% bonus depreciation and any state or utility incentives apply to your project.
Sources
- USDA Rural Development: Rural Energy for America Program, renewable energy systems and energy efficiency improvement grants and guaranteed loans · checked October 20, 2026
- Federal Register: Rural Energy for America Program (REAP), final rule with comment period, 91 FR 62599 (October 1, 2026), on govinfo · checked October 21, 2026
- 13 CFR 120.931: 504 lending limits (including energy public policy projects) · checked October 17, 2026
- 26 CFR 53.4944-3: exception for program-related investments (with examples) · checked October 20, 2026
- IRS Publication 946: How To Depreciate Property (section 179 limits for 2026, special depreciation under P.L. 119-21) · checked October 20, 2026
Facts about each route are sourced on its own page.