PACE financing is a not a loan, lease or debt. Rather, it is a property tax assessment on the real estate where the project resides. Payment is made when property tax is due and is added as a line item to the real estate owner’s property tax bill.
Other features include:
- Long term financing (up to 30 years)
- Does not require personal or corporate guarantee
- No financial statement review (under $1 million)
- No lender consent (under $1 million)
- May be considered “Off Balance Sheet” when business benefiting from project does not own the underlying real estate
- Can only be financed with real estate (leasehold tenant may not be eligible)
- Tax benefits remain with project owner
- Requires real estate equity
- Can be maximized at between 90 – 100% loan to value