The U.S. Small Business Administration (SBA) environmental due diligence requirements for the SBA 504 and SBA 7(a) Loan Programs both include the SBA’s Records Search with Risk Assessment (RSRA) report. Since about 2007, this quick and inexpensive report has been a viable alternative to the Phase I Environmental Site Assessment (ESA) in cases where the SBA’s NAICS code list of environmentally sensitive industries (higher risk properties) does not include the property’s current usage.
The Records Search with Risk Assessment makes it easy to screen for environmental risk on both SBA and non-SBA loans. That’s why we call our version of this report the EZ-Screen!
According to the SBA’s environmental policy, the following process is required for environmental risk evaluation:
Follow up is very important for any recommendations which may result from the Records Search with Risk Assessment (RSRA). Lenders will avoid potentially staggering risks and resultant costs that can stem from financing contaminated property. When working with borrowers, it’s always critical to explain to them that the Records Search with Risk Assessment or Phase I ESA not only protects the bank; it also protects THEIR investment. Once they recognize this reality, they usually sleep better with the knowledge that their investment has a low risk of hazardous contamination.
What exactly does the Records Search with Risk Assessment (RSRA) consist of?
The Records Search with Risk Assessment (RSRA) uses some elements of a Phase I ESA, but generally is not as comprehensive or as detailed.
The report will generally consist of (but may not be limited to) the following components:
Can the Records Search with Risk Assessment be used for Non-SBA Commercial Real Estate Loans? Sure! Many non-SBA lenders use the RSRA as their “first-cut” risk-screening tool, along with a questionnaire. If used as part of a comprehensive environmental risk management policy, the Records Search with Risk Assessment has many advantages over simply ordering a “government database report” such as those provided by several big “3 letter” companies:
Why choose Sierra Environmental Consultants as your Records Search with Risk Assessment (RSRA) provider?
Feel free to give Dave VerSluis a call at (800) 769-7437 if you have any questions about how a Sierra Consultants EZ-Screen (Records Search with Risk Assessment) can make your deal flow faster, less risky and less expensive. Or feel free to go ahead and place an order on our secure ordering portal.