SBA does not always require a Phase I Environmental Site Assessment

With SBA volume increasing we are seeing more requests for Phase I ESAs as a result of RS/RAs coming back as high risk.  An initial RS/RA we were involved evolved to high risk solely on the presence of an adjoining dry cleaner.  Further Inquiry during the subsequent Phase I ESA identified the subject site as a former gas station with multiple USTs.  This was only discovered in building department files (which many EPs do not even check) and was completely missed in the initial database and city directories.  Sanborns were not available.

If not for the adjoining dry cleaner, (resulting in low risk if it were not there) the purchaser would have bought a property that could have major environmental issues.  We just completed the Phase II ESA and there is impact and we are going to save the purchaser a lot of grief.  And of course, through out the entire process the directive was to do as little as possible to satisfy the SBA Policy.  As we always preach, new purchases should always require a Phase I ESA.  Borrower beware if you are letting the bank drive risk management or Due diligence on a new purchase.  The SBA and a banks risk evaluation is totally different than a land owners.