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E3 Bank Intends to Invest in Green Businesses

Scott Cooney | Wednesday June 3rd, 2009 | 0 Comments

e3%20logo.gifPreviously on Triple Pundit, John Gartner covered the launch of a green bank that will provide loans with a Triple Bottom Line purpose and focus to green businesses and projects. Today at 3:30 EST, the bank is holding one of its investor webinars for those interested in owning E3 Bank stock and investing in changing the financial industry for the greener.

Sandy Wiggins, former chair of the U.S. Green Building Council, and Frank Baldassarre, Jr., a bank industry veteran, teamed up to launch E3 Bank, a bank that will give preferential loans to green projects, especially green building projects. The premise is that traditional lenders don’t understand the potential for Return on Investment in many green projects, and conform to strict lending principles which can sometimes penalize sustainability initiatives simply because they are new or different or both. Wiggins and Baldassarre, Jr. thought this was counter-intuitive: sustainability initiatives help improve the financial return of most long-term investments, which bank loans usually are. Traditional lenders just might not have figured that out yet.

There is sound logic. To put it in layman’s terms, if a green, LEED certified building has lower maintenance and utility costs (which it should), the monthly payment on the loan is easier to make because the owner has more money left over after other bills are paid. If the monthly payment is easier to make, the risk of default is reduced. If the risk of default is reduced, the bank is happy. If the bank is happy, loans can be offered at a lower rate. Which is exactly how E3 Bank plans to operate.

E3 offers a simple way to invest by letting people buy stock in E3 Bank. E3 has opened this opportunity to investors other than traditional Blueblood capitalists by setting the minimum investment at $5,000. This approach may help democratize E3 Bank in a way that beholdens them to more owners and more diverse owners, much in the same way small, internet based donations changed the face of the political landscape and allowed Barack Obama to raise tremendous amounts of money without having to raise it only from large donors with agendas that might not be in the best interest of the country.

Scott Cooney is the author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill), and hopes that someday, the green economy will simply be referred to as…the economy.
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