Skip to content
  • Looking for Parts? Visit Trane Supply
  • Education Plattform

Select Your Language

Selecting a language changes the language and content on the Trane site.

  • United States English
  • Canada English
  • Argentina Spanish
  • Mexico Spanish
  • Brazil Portuguese Spanish
  • Aruba English
  • Bahamas English
  • Belize English
  • Bermuda English
  • Bolivia Spanish
  • Bonaire English
  • Cayman Islands English
  • Chile Spanish
  • Colombia Spanish
  • Costa Rica Spanish
  • Curacao English
  • Dominican Republic Spanish
  • Ecuador Spanish
  • El Salvador Spanish
  • Grenada English
  • Guadeloupe English
  • Guatemala Spanish
  • Guyana English
  • Haiti English
  • Jamaica English
  • Martinique English
  • Netherland Antilles English
  • Nicaragua Spanish
  • Panama Spanish
  • Paraguay Spanish
  • Peru Spanish
  • Puerto Rico Spanish
  • Saint Lucia English
  • St. Vincent & Grenadines English
  • Suriname English
  • Trinidad & Tobago English
  • Venezuela Spanish
  • Armenia English
  • Austria German
  • Belarus Russian
  • Belgium English
  • Croatia English
  • Czech Republic Czech
  • Denmark English
  • Estonia English
  • Finland English
  • France French
  • Georgia English
  • Germany German
  • Greece Greek
  • Hungary Hungarian
  • Israel English
  • Ireland English
  • Italy Italian
  • Kazakhstan Russian
  • Latvia English
  • Lithuania English
  • The Netherlands Dutch
  • Norway English
  • Poland English
  • Portugal Portuguese
  • Romania English
  • Russia Russian
  • Serbia Russian
  • Slovakia Czech
  • Slovenia English
  • Spain Spanish
  • Sweden English
  • Switzerland French German Italian
  • Turkey Turkish
  • Ukraine English
  • United Kingdom English
  • Azerbaijan Русский
  • Tajikistan Русский
  • Uzbekistan Русский
  • Turkmenistan Русский
  • United Arab Emirates English Arabic
  • Qatar English
  • Kuwait English
  • Egypt English
  • Lebanon English Arabic French
  • Iraq English
  • Jordan English
  • Mainland of China 选择语言
  • Korea, Republic of (South Korea) Korean
  • Vietnam Vietnamese
  • India English
  • Australia English
  • Japan Japanese
  • Guam English
  • Thailand Thai
  • Taiwan Traditional Chinese
  • Hong Kong SAR English
  • Indonesia English
  • Malaysia English
  • Philippines English
  • Singapore English
  • New Zealand English
  • Services
    • Services
    • Energy & Sustainability
      • Energy & Sustainability
      • Energy Monitoring & Analysis
      • Energy Supply
      • Active Energy Management
      • Renewable Energy & Distributed Energy Resources
      • Energy Conservation Measures (energy efficiency)
    • Operate, Maintain & Repair
      • Operate, Maintain & Repair
      • Connectivity & Cloud Services
      • HVAC System Management
      • HVAC System Repair
      • Rental
    • Upgrade & Modernize
      • Upgrade & Modernize
      • Building Systems
      • HVAC System Retrofits
      • HVAC Equipment Upgrades
      • Financing & Energy Services Contracting
      • Indoor Air Quality Assessment
      • Ready for now
  • Products
    • Products
    • VRF & Ductless Solutions
      • VRF & Ductless Solutions
      • N-Gen CITY MULTI VRF
      • P Series
      • Nv Series
      • VRF System Design
    • Chillers
      • Chillers
      • Water-Cooled Chillers
      • Air-Cooled Chillers
      • Cold Gen Scroll Chillers
    • Packaged Units & Split Systems
      • Packaged Units & Split Systems
      • Rooftop Units
      • Split Systems
      • Self-Contained Units
      • Water Source Heat Pumps
      • Dedicated Outdoor Air Units
    • Energy Management & Controls
      • Energy Management & Controls
      • Building Management Systems
      • Building Automation Systems
      • Trane® Air-Fi™ Wireless Systems
      • Controllers
      • Thermostats
      • Accessories
    • Air Handling
      • Air Handling
      • Terminals
      • Sensible-Cooling Terminal Unit
      • VAV (Variable Air Volume) Units
      • Performance Air Handlers
      • Air Handling Accessories & Controls
    • Energy Storage
      • Energy Storage
      • Energy Storage Systems
    • Precision Cooling
      • Precision Cooling
      • Precision Cooling
    • Residential Units
  • Industries
    • Industries
    • Higher Education
    • Indoor Agriculture
    • K-12
    • Data Centers
    • Restaurants
    • Commercial Real Estate
    • Healthcare
    • Local Government
    • Hospitality
      • Hospitality
    • Industrial
  • About
    • About
    • About Us
    • Contact Us
    • Customer Stories
    • Looking for Parts? Visit Trane Supply
    • Education Plattform
    • North America
      • North America

      • United States English
      • Canada English
    • Latin America
      • Latin America

      • Argentina Spanish
      • Mexico Spanish
      • Brazil Portuguese Spanish
      • Aruba English
      • Bahamas English
      • Belize English
      • Bermuda English
      • Bolivia Spanish
      • Bonaire English
      • Cayman Islands English
      • Chile Spanish
      • Colombia Spanish
      • Costa Rica Spanish
      • Curacao English
      • Dominican Republic Spanish
      • Ecuador Spanish
      • El Salvador Spanish
      • Grenada English
      • Guadeloupe English
      • Guatemala Spanish
      • Guyana English
      • Haiti English
      • Jamaica English
      • Martinique English
      • Netherland Antilles English
      • Nicaragua Spanish
      • Panama Spanish
      • Paraguay Spanish
      • Peru Spanish
      • Puerto Rico Spanish
      • Saint Lucia English
      • St. Vincent & Grenadines English
      • Suriname English
      • Trinidad & Tobago English
      • Venezuela Spanish
    • Europe
      • Europe

      • Armenia English
      • Austria German
      • Belarus Russian
      • Belgium English
      • Croatia English
      • Czech Republic Czech
      • Denmark English
      • Estonia English
      • Finland English
      • France French
      • Georgia English
      • Germany German
      • Greece Greek
      • Hungary Hungarian
      • Israel English
      • Ireland English
      • Italy Italian
      • Kazakhstan Russian
      • Latvia English
      • Lithuania English
      • The Netherlands Dutch
      • Norway English
      • Poland English
      • Portugal Portuguese
      • Romania English
      • Russia Russian
      • Serbia Russian
      • Slovakia Czech
      • Slovenia English
      • Spain Spanish
      • Sweden English
      • Switzerland French German Italian
      • Turkey Turkish
      • Ukraine English
      • United Kingdom English
      • Azerbaijan Русский
      • Tajikistan Русский
      • Uzbekistan Русский
      • Turkmenistan Русский
    • Middle East
      • Middle East

      • United Arab Emirates English Arabic
      • Qatar English
      • Kuwait English
      • Egypt English
      • Lebanon English Arabic French
      • Iraq English
      • Jordan English
    • Asia Pacific
      • Asia Pacific

      • Mainland of China 选择语言
      • Korea, Republic of (South Korea) Korean
      • Vietnam Vietnamese
      • India English
      • Australia English
      • Japan Japanese
      • Guam English
      • Thailand Thai
      • Taiwan Traditional Chinese
      • Hong Kong SAR English
      • Indonesia English
      • Malaysia English
      • Philippines English
      • Singapore English
      • New Zealand English
  • Energy & Sustainability
  • Operate, Maintain & Repair
  • Upgrade & Modernize
  • Energy Monitoring & Analysis
    Energy Monitoring & Analysis
  • Energy Supply
    Energy Supply
  • Active Energy Management
    Active Energy Management
  • Renewable Energy & Distributed Energy Resources
    Renewable Energy & Distributed Energy Resources
  • Energy Conservation Measures (energy efficiency)
    Energy Conservation Measures (energy efficiency)
More on Energy & Sustainability
  • Connectivity & Cloud Services
    Connectivity & Cloud Services
  • HVAC System Management
    HVAC System Management
  • HVAC System Repair
    HVAC System Repair
  • Rental
    Rental
More on Operate, Maintain & Repair
  • Building Systems
    Building Systems
  • HVAC System Retrofits
    HVAC System Retrofits
  • HVAC Equipment Upgrades
    HVAC Equipment Upgrades
  • Financing  & Energy Services Contracting
    Financing & Energy Services Contracting
  • Indoor Air Quality Assessment
    Indoor Air Quality Assessment
  • Ready for now.
    Ready for now
More on Upgrade & Modernize
  • VRF & Ductless Solutions
  • Chillers
  • Packaged Units & Split Systems
  • Energy Management & Controls
  • Air Handling
  • Energy Storage
  • Precision Cooling
  • Residential Units
  • N-Gen CITY MULTI VRF
    N-Gen CITY MULTI VRF
  • P Series
    P Series
  • Nv Series
    Nv Series
  • VRF System Design
    VRF System Design
More on VRF & Ductless Solutions
  • Water-Cooled Chillers
    Water-Cooled Chillers
  • Air-Cooled Chillers
    Air-Cooled Chillers
  • Cold Gen Scroll Chiller
    Cold Gen Scroll Chillers
More on Chillers
  • Rooftop Units
    Rooftop Units
  • Split Systems
    Split Systems
  • Self-Contained Units
    Self-Contained Units
  • Water Source Heat Pumps
    Water Source Heat Pumps
  • Dedicated Outdoor Air Units
    Dedicated Outdoor Air Units
More on Packaged Units & Split Systems
  • Building Management Systems
    Building Management Systems
  • Building Automation Systems
    Building Automation Systems
  • Trane® Air-Fi™ Wireless Systems
    Trane® Air-Fi™ Wireless Systems
  • Controllers
    Controllers
  • Thermostats
    Thermostats
  • Accessories
    Accessories
More on Energy Management & Controls
  • Terminal units
    Terminals
  • Sensible-Cooling Terminal Unit
    Sensible-Cooling Terminal Unit
  • VAV Units
    VAV (Variable Air Volume) Units
  • perf-CSAA
    Performance Air Handlers
  • Air Handling Accessories & Controls
    Air Handling Accessories & Controls
More on Air Handling
  • Energy Storage Systems
    Energy Storage Systems
More on Energy Storage
  • Precision Cooling
More on Precision Cooling
Read Customer Story

Creating a comfortable and inviting atmosphere for 1177 West Hastings

Higher Education K-12 Restaurants Healthcare Hospitality Industrial
Indoor Agriculture Data Centers Commercial Real Estate Local Government
Read Blog Post

4 Questions to Determine Your Equipment Upgrade Strategy

About Us Customer Stories
Contact Us

CONTACT A TRANE EXPERT

Puerto Rico Sales & Service Office

Consider Creative Financing to Take a Holistic Approach in the “New Normal”

By: Jeff Light, MBA, Director, Strategy & Business Development, Finance

July 09, 2020

Financing.jpg

Building owners and managers are facing new pressures as we all navigate the “new normal.”  While budget pressure may be higher than ever, there is also a pressing need to optimize the indoor environment – and progressing so can meet multiple business objectives.

In fact, working to ensure that your indoor spaces offer high satisfaction can help you:

 

  • Increase  confidence that occupants can feel safer in a facility that offers comfortable,  cleaner air;
  • Support resilience against future challenges by deploying trusted solutions; and
  • Contribute to your building’s overall productivity with targeted investments that generate results.

Yet, how do you fund now-top-priority air quality solutions, when critical demands such as staffing, reduced revenues, other operating expenses and competing capital demands are eating up most or all of your budgets?

You may even have deferred maintenance needed to optimize the building environment and now the need is more critical than ever. You also may be constrained to allocate capital funds to those needs due to existing debt service requirements and covenants, internal hurdle return rates or on-going debt for other competing projects through traditional financial channels.

In addition, in the “new normal,” a connected building technology strategy is essential to generate actionable data to make financial decisions and stay proactive on remotely managing your building environment while gaining cost-saving and efficiency benefits. A recent IDC and Acuity Brands survey [1] reports that almost 30 percent of building management companies have deployed a connected building solution, with another 60 percent also considering it.

Creative Financing Can Free Up Budget

Fortunately, creative financing exists that can help you address optimizing indoor air quality, aging infrastructure and deferred maintenance and free up limited capital to address those emergency efforts.

Disruption to traditional financing approaches to address mission-critical tasks is underway in multiple markets including: higher education, healthcare, secondary education, commercial and industrial, and municipal.

CARES Act Incentives

The following is an example of a couple of the incentives in the Coronavirus Aid, Relief, and Economic Securities Act (CARES Act) package:

  1. The Education Stabilization Fund consists of $30.750 billion to be distributed among states, local schools, higher education institutions and other entities providing educational services that were impacted by COVID-19. This includes $3 billion to be distributed among governors of each state to provide emergency support for the continued operation of educational institute services.
  2. Businesses that made certain capital investments over the past two years may be entitled to tax refunds now that Congress has fixed a provision in the tax code that denied generous cost recovery treatment to “qualified improvement property (QIP).” The CARES Act contained an important tax code fix that could return tax dollars to businesses now that made expenditures on QIP to improve an interior portion of a building that is nonresidential real property, including installation of a new HVAC system, in 2018 and 2019. The changes are effective retroactively as of Sept. 27, 2017, so businesses may want to evaluate previous or upcoming capital projects to factor in this more favorable tax treatment and take steps now to claim tax benefits to which you now may be entitled. Important caveat –depreciation and tax accounting are complicated; be sure to talk through any tax strategies with a certified tax professional.

Other Creative Financing Options

When it comes to creative financing options not specifically tied to the CARES Act, an energy savings agreement, (ESA), offers an alternative to traditional project acquisition and financing that provides 100-percent financing for energy services projects implemented and performance guaranteed by energy services companies, such as Trane®. This innovative option also helps organizations obtain a credit neutral approach to their rating.

This is a structured financing offering, arranged with a special purpose entity or trustee. Properly structured, the ESA may be treated as a services contract that should not be recognized as a debt obligation and should not adversely impact the organization’s credit capacity or balance sheet treatment.

Hospital Uses ESA to Finance Needed Upgrades

As an example, a hospital in the northeast United States turned to an ESA when leaders sought to upgrade aging infrastructure to improve comfort, increase operational efficiency and combat high energy costs. With limited capital available, hospital leaders still needed to initiate critical improvements, including replacement of 50-year-old air handlers.

When hospital leaders expressed interest in alternative financing options, Trane initiated conversations with a structured financing partner regarding the hospital’s financing needs. The hospital, Trane and the financing partner evaluated the potential upgrade options to prioritize the measures that would best address infrastructure needs and enable the hospital to apply savings, resulting from the upgrades, to help pay for other needed improvements.

The hospital selected the ESA as the best financing structure fit for this strategic need, which allowed the hospital to move forward with the project, while adhering to its tight budget parameters. The ESA gave them the option of leasing equipment for their immediate use and purchasing it at a later date.

Working together, Trane and the hospital implemented infrastructure upgrades to optimize operations, lower energy costs, provide better patient and staff comfort, and reduce equipment noise levels. The upgrades have resulted in an overall utility cost savings of more than 20 percent.

The approach the hospital leaders implemented represents just one of a number of ways organizations can innovatively finance building improvements. These fiscal options can help an organization use innovative financial vehicles that address their building needs holistically and programmatically outside of capital budgets.

These financial vehicles, which also include public-private-partnerships, concession agreements and power purchase agreements, enable organizations to take advantage of energy and operational efficiency gains and in some circumstances non-traditional ownership models. By working with an energy service company experienced in non-traditional financing options, an organization can determine which creative financing solution best meets its needs.

Click here to learn more about non-traditional financing options for your organization.

 

  • Disclaimer:  The information provided herein is general information and not intended as advice or recommendation of any specific course of action. In providing this general information, Trane working with our financial partners are not suggesting an action or acting as an advisor. Any recipient must act in their own interests and discuss such information with any and all internal or external advisors and experts, who owe a fiduciary duty to the recipient, before undertaking any action.

 

[1]Challenges of Implementing Connected Building Projects Infographic, 2019, Sponsored by Acuity Brands

  • About Trane
  • Customer Stories
  • Locate a Sales Office
  • Careers
  • Contact Us
  • Environmental Compliance
  • Quality
  • Ethical Business Conduct
  • Supplier Terms
  • Facebook
  • LinkedIn
  • YouTube
  • Instagram

Privacy Policy  |   Terms of Use

Trane Technologies