Friday, June 1, 2012

Revised SBA Procedure SOP 50 10 5(E) Effective June 1

A new U.S. Small Business Administration (SBA) procedure became effective June 1, 2012 for the agency’s 7(a) and Certified Development Company (CDC) loan programs. As of that date, all documentation submitted in support of SBA loans needs to be updated to reflect SOP 50 10 5 (E), not its predecessor, SOP 50 10 5(D).

Since its initial release, the SBA has made a number of revisions and clarifications to SOP 50 10 5, Chapter 4, Section III (Environmental Policies and Procedures) in response to comments from lenders and the environmental professionals who support work under these two lending programs. Previous revisions reflected new language clarifying the role of qualified environmental professionals, additions/deletions to the NAICS code list of environmentally sensitive industries, a unique set of requirements for gas stations loans or loans on properties that once housed dry cleaners, among other changes.

Unlike previous SBA updates, SOP 50 10 5(E) is much more similar to the previous version (D). Version E does have one significant change related to loans processed under the SBA SLA program (as is the case for the SBA’s PLP, SBA Express, Export Express and Patriot Express programs). Lenders must still follow the guidelines, but do not have to submit documentation or obtain SBA’s concurrence prior to approval or disbursement of the loan in most cases.

Like the previous version of the SOP, for all property (except for a unit in a multi-unit building), the lender/CDC must compare the property’s current and known prior uses and compare the NAICS code(s) to the list of environmentally sensitive industries. Then, if there is a NAICS code match, the Environmental Investigation must begin with an AAI-compliant Phase I ESA conducted by a qualified environmental professional, regardless of the amount of the loan. In this revision, SBA did not make any changes to the qualifications required of environmental professionals, the NAICS code list, the Reliance Letter language or other elements of the environmental requirements.

 Caltha LLP is a Qualified Environmental Professional and assists Lenders in meeting SBA Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

Click here for Caltha SBA Environmental Assessment Services page