The U.S. Small Business Administration has announced upcoming changes to its environmental policies and procedures under SOP 50-10-5(B), Lender and Development Company Loan Programs. These changes will be effective October 1, 2009. The key changes made to the environmental policies for Lenders and Certified Development Companies to participate in SBA lending programs include:
- Clarification that, in the case of gas stations (NAICS code 447), the Environmental Investigation must begin with a Phase I;
- On-site dry cleaners in operation for more than five years must undergo a Phase II Environmental Site Assessment, in addition to a Phase I (which would be required due to the NAICS code match);
- For special use facilities (daycare or child care centers, nursery schools), revision to the date of construction for conducting a lead risk assessment for lead-based paint from 1978 to 1980;
- Revised definition of "environmental questionnaire" to reflect that if the current owner or operator of the property will not sign the questionnaire, it cannot be used, and the lender must then, at a minimum, obtain a Transaction Screen;
- Acknowledgment that the SBA will recognize a Phase II ESA conducted "in accordance with generally-accepted industry standards of practice and consisting of a scope of work that would be considered reasonable and sufficient to identify the presence, nature and extent of a release;"
- Establishing a shelf life of 1 year for the Records Search with Risk Assessment; and
- Minor clarifications to the list of NAICS codes that trigger Phase I ESA requirement.
The new SOP also reflects any policy and procedural notices issued between January 1, 2009 and June 30, 2009. In addition, the SBA has determined that updating the SOP every six months is no longer necessary; in the future SBA will update its SOP every 12 months.
Caltha LLP assists prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.