The Small Business Administration has recently updated the SOP 50 10 5 (C) standards as of 10/01/2011; making them now the SOP 50 10 5 (D) standards. Below are the major changes that have been implemented for environmental due diligence:

Multi-Unit Building

Initial action for a property located in a multi-unit building will be determined by the loan size for the property. Should the loan amount be less than or equal to $150,000 then the environmental investigation may begin by using an environmental questionnaire. Environmental questionnaires are basic questionnaires that identify the potential environmental risks of the property and they do not have to be reviewed by an environmental professional unless they are shown to have a possible risk associated with the property. Should the loan exceed $150,000 then an environmental questionnaire and a Records Search with Risk Assessment report must be conducted.

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Indemnitor cannot be the borrower or operating company on a contaminated site

Should the subject property be identified as contaminated or has had remediation occur, then the borrower or the operating company cannot be the indemnitor for the subject property. An analysis from the CDC must still be done on the indemnitor to assure that they have enough assets for them to honor the indemnification agreement. This prevents malpractice between lenders and the environmental companies performing the remediation.

Special use facilities – Lead Risk Assessments for properties built prior to 1980

Residential care facilities that are occupied by children must now undergo a lead risk assessment and lead water testing if the facility was built prior to 1980. This requirement is still required for nursery schools, daycare, and childcare facilities. Residential care facilities built prior to 1980, which do not house children, no longer have to conduct a lead risk assessment or lead water testing. It is important to remember that a lead risk assessment does not involve XRF machine testing. A simple dust wipe sample and visual inspection by a certified lead inspector is what is required along with the lead water sampling.

Equipment Testing
When performing an environmental investigation, an environmental professional must also include whether or not the gas station is determined to be compliant with all state requirements for tank and equipment testing, should any requirements be in place. Until this is complete, then the loan cannot be disbursed. Should any of the equipment be defective or leaking ,then it must be replaced.

Further changes have been done to the SOP standards. For the new SOP standards please click on the following link which will open a PDF file: Click Here

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