The National Small Business Association has released a report showing that small business collectively could reduce their greenhouse gas emissions by 259 million tons each year if they improved their energy efficiency by just 25 percent through a mechanism known as on-bill financing.

The report, "On-Bill Financing: Helping Small Business Reduce Emissions and Energy Use While Improving Profitability," goes on to highlight the significant savings small businesses stand to achieve through on-bill financing

"This report obliterates that old paradigm that environmental conservation is anathema to economic growth," said NSBA president Todd McCracken in a statement. "Quite simply, small businesses can increase their profitability while reducing their carbon footprint."

On-bill financing is a mechanism that enables small businesses to work with their utility company to improve their energy efficiency. In practice, a local utility company identifies a small business with potential savings and evaluates their energy use and the company's financial stability. The utility company then extends a low- or no-interest loan to the small business to make energy-efficient upgrades. The small-business owner repays the loan by continuing to pay the average monthly bill, while any money paid in excess of what their actual costs are will go directly to pay down the loan.

Currently implemented in several states, on-bill financing programs have made thousands of loans to small businesses. According to the report, energy-efficiency programs such as on-bill financing can help the average small business save $4,932 — and oftentimes more —  every year on its energy bills. The report also makes recommendations on how the federal government can help facilitate additional on-bill financing programs.

"The No. 1 reason small-business owners cite for their inability to make their firms more energy efficient is cash-flow," said NSBA chair Keith Ashmus. "Programs such as on-bill financing can eliminate this very significant barrier."

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