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How much $ do firms borrow for P2?



Hi P2 techsters and ONE-L folks
Bill Narotski of the Ohio EPA was kind to send me details of their Pollution
Prevention Loan Program.  I have analyzed the loans they made to firms for
various P2 process improvements.  The doc I got reports 27 loans made.  They
were real process/tech improvements and not pollution control.  The average
amt was  $175,112, the median amt was  $150,000, min =  $25,050, max =
$350,000.  The doc does not report the total investment by the firms, just
the amount they borrowed.  It is reasonable to assume that firms probably
put in additional funds or in-kind labor to make these work, so I think it
is reasonable to assume that the average P2 investment is closer to
$200,000.

This is a surprise to me.  I thought there would be more firms looking for
smaller loans.  Question:  Do P2 techsters think there is demand for smaller
loans and the demand is not being met?  Or, are smaller loans being
requested by small firms that don't really qualify as good borrowers, so
they don't get funded? (I think that is often likely).  Or, do firms have to
be of a certain size and capacity to take advantage of specialized loan
programs (also likely).  Perhaps the nature of P2 process/technology
improvements is such that they really do require a significant chunk of
capital?  Sure, we like to say that there is a lot of low hanging fruit
etc., but if firms commonly have to spend over a hundred thousand dollars to
make P2 improvements, well hell, my grandpa would say, no wonder that dog
won't hunt...

Honestly, I don't know what these numbers represent, but they sure do raise
some interesting questions about the financial thresholds firms must face
when moving towards P2.  I am interested to hear from you in the field about
what kinds of capital needs your P2 clients face, and what they do when they
are smaller and the projects are smaller.  I guess I am saying that the P2
challenge out there does not really seem to be in the firms that are capable
of handling a $200,000 loan; certainly in many parts of the world you are a
success already if you can even think about that kind of investment.  Is the
Ohio lending experience typical of P2 investments, if so what does that mean
for P2 promotional strategy?

I am producing a massive paper on P2 financing and will be happy to include
any feedback you can give in it, with appropriate credits, and share the
results with you if you are interested.  I hope we can get a little dialog
about this going on P2TECH.
**************************************
Burton Hamner
Hamner and Assocaties LLC
5534 30th Avenue NE
Seattle WA 98105  USA
Tel:  206-526-5308
Fax: 208-279-4991
Email:  bhamner@cleanerproduction.com
Web:  www.cleanerproduction.com
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