Greenhouse Financing Options
Many growers need a year-round greenhouse but struggle to finance the full project upfront. Below are several financing options, including both greenhouse loans and grants, offered through some of our partners. Options depend on what type of grower you are — whether a commercial greenhouse grower, school greenhouse grower, or part of a non-profit organization. At this time, we do not know of financing options for residential greenhouses. (If you know about a resource not listed here, please let us know.)
Jump to Topic:
Commercial Greenhouse Growers
Loans for Greenhouses
For: New commercial greenhouses. There are three noteworthy types of loans: Bank Loans, Farm Loans, and Small Business Loans.
Certain types of greenhouses (metal structures) are often considered equipment and easier to finance. In some situations constructions loans or even private loans may appropriate.
These are funds borrowed from financial institutions with the expectation of repayment with market-rate interest accrued over a specified period. The borrower must have a credit history and collateral to secure the loan. Banks offer various types of loans, including personal loans, business loans, mortgages, and others.
Government farm loans are low-interest loans extended to farmers and ranchers by the federal government to support their operations. The loans can be used to purchase land, livestock, farm equipment, and other supplies necessary for farming. The loans may also cover farm operating expenses such as seed, fertilizer, and fuel.
Small Business Loans
Government small business loans are financial aid extended by the government to small businesses to help them start or expand their operations. These loans may be used to purchase equipment, pay for rent or inventory, or cover operating expenses. The government sets eligibility criteria for small businesses to qualify for these loans, such as the size of the company and the nature of its operations.
Private Loans: Contain Inc
We have partnered with Contain Inc to help our growers find greenhouse financing and insurance. Contain Inc is an alternate finance group dedicated to indoor growers, so they already have information on our equipment and know the indoor agriculture industry well. They work with growers working in greenhouses, warehouses and containers and fund clients from new startup farms through to multi-generational ones. They have also worked with a leading regional insurance broker to create indoor ag-specific insurance.
Grants for Greenhouses
Financing for greenhouse equipment and related larger impact projects can sometimes be secured through several different types of grants:
- Private Foundations (local, state and national)
- County and State Government Grants
- Federal Grants (USDA, Energy, Education, etc.)
What is Grant Financing?
Grant financing is a type of financial assistance provided by various organizations, including governments, foundations, and corporations, to fund projects that align with their objectives. The funds provided through grants do not need to be repaid, making them an attractive source of financing for individuals and organizations seeking to fund projects. One of the main benefits of grant financing is that it enables individuals and organizations to access funding that they would not have been able to obtain otherwise and is “non-dillutive” (does not require sale of equity in exchange for funds).
Grants are typically made to nonprofit or public organizations, coalitions or partnership coalitions. Grantsmanship is a competitive process, which is why it is important to understand grant formatting as well as the priorities of each funder. Some grants take 3 to 6 months for funder review. Grants are one component of a total philanthropy strategy for raising money. We work with LEAD Vision, LLC for grant writing and training services, as well as philanthropy strategy consultation, to help customers financing their vision.
Local vs Federal Grants?
It is also critical to understand the difference between local and federal grants. Finding local grants is often a much faster path to success than applying for federal grants. Local grants are typically focused on challenges faced at the state or local level. The organizations providing these grants are also typically much more responsive to questions and much more willing to be flexible with the types of projects they will consider. When grant hunting, be sure not to overlook local funding as an option.
National Grants for Commercial Greenhouses
For: Existing commercial greenhouse growers who want to make energy-efficiency improvements. New commercial greenhouses who want to add a renewable energy system.
The Rural Energy for America Program (REAP) has a program called Renewable Energy Systems & Energy Efficiency Improvement Loans & Grants. The program helps farmers save energy in their operation by financing upgrades, including greenhouses. The money can be used to upgrade an existing structure or add a renewable energy system to an existing greenhouse. For example, by adding insulation to the North side you can make an energy-efficient commercial greenhouse more efficient, following passive solar greenhouse design. Alternatively, the money can be used to add an energy-efficient or renewable energy system, such as adding a solar panel to help power the building, or a Ground to Air Heat Transfer (GAHT®) system to heat and cool the building year-round. The money cannot be used for building a new structure.
REAP Grants can be applied to both solar and wind energy for greenhouses. More information available on the REAP program website.
National Resources Conservation Service (NRCS) EQIP Grants
For: Existing commercial greenhouse growers who want to make energy-efficiency improvements
Similar to the REAP program, EQUIP On-Farm Energy Initiative helps farmers to save energy with equipment upgrades. Greenhouse improvements – such as adding insulation, using passive solar greenhouse design, or installing more efficient heating / cooling systems – are eligible for funding (if your farm meets the requirements). The program has two parts. First, it provides an energy audit. Once the audit is complete and on file with the NRCS, the program funds much of the recommendations in the audit. Most commercial greenhouse growers receive 75% of projects cost.
Recently, in 2022, $19.5 billion was allocated for The Inflation Reduction Act, 43% of which is for the EQIP program. More information on the EQUIP website.
SARE Research Grants
For: commercial greenhouse growers, non-profits, schools, and individuals that want to conduct a research project relating to sustainable greenhouse growing.
The Sustainable Agriculture Research and Extension (SARE) is government-funded organization that administers grants for education and research relating to sustainable agriculture. This spans a huge range of sectors, from permaculture to animal production. They also fund research related to season extension, including growing in a year-round greenhouse. Grants are available to all types of growers –commercial greenhouse growers, non-profit and research organizations, professionals, students, schools and individuals.
Past greenhouse-related grants include installing a compost-heat recovery system, or an energy-efficient heat exchanger similar to a GAHT® system. A key ingredient of all SARE grants is research: the project must research something related to sustainable agriculture and document the results. More information on the SARE website.
State Grants for Commercial Greenhouses
While Federal dollars are having a significant impact on the accessibility of financing for indoor agriculture, there is also significant action at the state level. As awareness and understanding of the technology continues to grow, many states and even municipal governments are passing legislation designed to support (or in some cases even mandate) indoor agricultural practices.
- Colorado House Bill 22-1301
- Redefining Controlled Environmental Agricultural facility as Agricultural Property
- New York Senate Bill 2415 (in process)
- Establishing an Office of Urban Agriculture
- California Act AB551
- Creating Urban Agriculture Incentive Zones
Ranging from providing additional funding, to creating state governance structures, to providing tax breaks for indoor agriculture, these initiatives vary widely by state. Spending a few minutes researching your state’s approach to and support for indoor agriculture is likely to provide context on local funding initiatives that may be much more accessible and lower effort than writing a federal grant proposal.
Projects that demonstrate strong growth potential, return on investment and community impact are sometimes investor worthy. Three types of investments are made by individuals and/or investment financing firms. These include:
- Angel Investment: generally, cover start-up operations, or research and development.
- Debt Financing: covering operating costs over a set period of time, with negotiated terms of return.
- Equity Financing: full financing through terms of joint ownership.
The development of a basic business document toolkit is required for an investor approach, including executive summary, business plan, budget proforma, and supporting research. Finding the right investor requires prospect research, as well as a communication strategy to attract interest. LEAD Vision LLC provides both business toolkit development support, growth advising and investor research and development.
School Greenhouse Programs
Several private companies offer grants to help fund school gardens. These are typically small grants, in range of $1,000 to $5,000, and aimed at starting an outdoor school garden. Most can apply to a year-round school greenhouse. The organization Grants for Plants has a list of small private grants for school gardens and greenhouses here: Seed Your Future
Of course, larger foundations exist that provide larger grants, but these may not apply to all schools. For example, the Edward E Ford Foundation provides funding for private and independent schools, for a range of projects, often including greenhouses.
Individual states also often have incentives for schools to become more energy-efficient, which can extend to upgrading or financing a new school greenhouse. The Colorado Energy Office, for example, provides energy audits and assistance with funding energy-efficiency improvements. Though they may be the ultimate source of funding, they can help a school procure funding through other sources.
Many schools ultimately provide some of their own funding for a school greenhouse. You can read more about our tips for designing a school greenhouse on our blog.
Resources for Non-Profit Organizations
Non-profit and community organizations can take advantage of some of the greenhouse financing resources above. By incorporating a research component into the greenhouse, they can apply for SARE grants.
Perhaps the highest effort (but potentially the largest reward) is the opportunity to lobby local and state governments to allocate state funding for specific projects aligned with their priorities. In these cases instead of seeking grant funding, loans, or investment, a project would be pitched directly to a local government. Approaches here vary on a case by case basis, but the general approach is to:
- Identify appropriate local funding sources (ones projects similar to yours)
- Developing a detailed project proposal/position paper
- Engaging with key government stakeholders to build support for your project
- Submit a formal request to your local government for funding
- Attend local government budget meetings to support your project
Overall, it is essential to demonstrate the value of your project and its potential impact on the community. Build relationships with decision-makers, engage with stakeholders, and participate in the budgeting process to increase the likelihood of securing funding from the local government.