The type and scope of the Post-default Environmental Investigation required varies depending on the risk of contamination, and SOP 50 51 3 provides the minimum standards. All Transaction Screen, Phase I and Phase II Environmental Site Assessments must be performed by an Environmental Professional and be accompanied by a Reliance Letter.
The SOP defines the process to be followed, which includes:
- Determining whether any underground liquid fuel storage tanks are located on the Property,
- Determining the NAICS codes for the Property's uses since the SBA Loan was funded, and whether any of the NAICS codes match codes on the list of NAICS Codes of Environmentally Sensitive Industries,
- Completing any additional testing, record searches or other inquiries recommended by the Environmental Professional who conducted the initial investigation.
In addition, if taking control of a business that handles hazardous substances is contemplated, the Post-default Environmental Investigation may also include an environmental audit to determine whether the business has the required environmental permits and is in compliance with applicable environmental laws. In some cases, testing of fixtures and equipment related to the operation of the business, including underground storage tanks, lines and related equipment may also be required.
If the Post-default Environmental Investigation Report concludes that the property is contaminated, SBA's prior written approval must be obtained. Regardless of the conclusions reached in the Post-default Environmental Investigation Report, SBA's prior written approval must be obtained prior to taking control of a business that handles hazardous substances.
Caltha LLP is a leading provider of environmental services to Lenders, and especially to Lenders needing to conform to SBA environmental review procedures. Caltha provides transaction screens meeting ASTM E 1528-06, Phase 1 Environmental Site Assessments meeting ASTM E 1527-05, Phase 2 investigations, and SBA Records Search With Risk Assessment RSRA reports, all certified by a qualified environmental professional.
For further information or to request a quote, go to:
Caltha Environmental Site Assessment & Risk Assessment