Understanding Due Diligence Requirements During an SBA Environmental Investigation

by Pam Jackson
May 24, 2016

Environmental Due Diligence

It s important to understand the Small Business Administration's (SBA) environmental due diligence requirements which guaranty 7(a) and 504 loans. The requirements are sometimes more stringent than traditional loans depending on past uses of the property and potential level of contamination risk. We work with lenders throughout Michigan, who look to us for our understanding and ability to anticipate the needs of the most recent Standard Operating Procedures. The SBA requires an Environmental Investigation of all commercial property which a security interest such as a mortgage, deed of trust, or leasehold deed of trust is offered as security for a loan or debenture.

The attached flowchart helps explain the steps of an environmental investigation required for SBA loan guaranty. The requirements may seem overwhelming, but they are not much different from Envirologic's traditional flow of due diligence. The type of properties that require a more in-depth Environmental Investigation include those with a current or past history of businesses with known environmental risks such as drycleaners, gas stations, or other environmentally sensitive industries.

To understand more about the various levels of due diligence investigation, please visit our website or contact a member of our due diligence team. By partnering with Envirologic, you can be assured a thorough, and comprehensive investigation will be completed to meet the requirements of the loan guaranty.

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sba  loan guaranty  environmental due diligence  environmental investigation 

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