The Small Business Administration's environmental policy (SOP 5010 5) has particular requirements regarding environmental duediligence on “high risk” properties, which includes Phase I Environmental Site Assessments andsometimes additional investigation.

To recap my previous blogs about the SBA's decision matrix on what kind of duediligence is done, generally all “high risk” properties require aPhase I Environmental Site Assessment (according to SBA's NAICS code list of environmental sensitiveindustry). “Low risk” properties can start with a lowerlevel of due diligence, usually either an EnvironmentalQuestionnaire or a Records Search with Risk Assessment (RSRA)report. There is one exception to the high risk propertyrule, which is for “car wash only” facilities, where there are noother environmentally sensitive operations such as auto servicingor fueling – these facilities can begin due diligence with theTransaction Screen Report. Otherwise, if you have a property typethat is listed on the NAICS codes, then SBA requires that theenvironmental investigation begin with an AAI Phase I EnvironmentalSite Assessment.

The SBA Phase I ESA

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