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SBA Crash Course: Phase I Environmental Site Assessments and Beyond

The SBA has particular requirements for environmental due diligence on "high risk" properties

The Small Business Administration's environmental policy (SOP 50 10 5) has particular requirements regarding environmental due diligence on "high risk" properties, which includes Phase I Environmental Site Assessments and sometimes additional investigation.

To recap my previous blogs about the SBA’s decision matrix on what kind of due diligence is done, generally all "high risk" properties require a Phase I Environmental Site Assessment (according to SBA's NAICS code list of environmental sensitive industry). "Low risk" properties can start with a lower level of due diligence, usually either an Environmental Questionnaire or a Records Search with Risk Assessment (RSRA) report. There is one exception to the high risk property rule, which is for "car wash only" facilities, where there are no other environmentally sensitive operations such as auto servicing or fueling – these facilities can begin due diligence with the Transaction Screen Report. Otherwise, if you have a property type that is listed on the NAICS codes, then SBA requires that the environmental investigation begin with an AAI Phase I Environmental Site Assessment.

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