The elusive SBA Environmental Questionnaire Form. Your first question is why is it so hard to find? It would be awfully nice if the Small Business Administration provided this in an easy format. They don’t. But not to worry, we’re going to cover it every way possible here.
SBA Environmental Questionnaire, what is it and why do I need it?
If you’re doing Small Business Administration lending, perhaps for the first time, you get to the part of the loan where you need to perform “environmental due diligence” and things get a little fuzzy. The SBA Environmental Requirements are best described with a flow chart which can be seen below. On the left hand side of the infographic you can see “environmental questionnaire” and you immediately wonder where you get this questionnaire. Of course, you’re wondering where the “official SBA Environmental Questionnaire” is. That’s where things get murky. If you look at the SBA SOP 50 10 6 (Download Official PDF) you will find there is no questionnaire in it.
What does the Standard Operating Procedures (SOP) say?
The text below in italics is directly from the SOP:
“Environmental Questionnaire” means the questionnaire used by a Lender to determine the likelihood that Contamination may be present at Property offered to secure an SBA-guaranteed loan. SBA Environmental Questionnaires must be completed or reviewed by a Lender that has made at least one site visit to the Property and a good faith effort to conduct an interview with the current owner or operator of the Property. An Environmental Professional may, but is not required to, assist with the responses to the questionnaire. An Environmental Questionnaire may be considered if it was completed up to 1 year prior to submission. The current owner or operator of the Property must sign the Environmental Questionnaire. If the current owner or operator of the Property will not sign the Environmental Questionnaire it cannot be used and lender must then, at a minimum, obtain a Transaction Screen.
An acceptable Environmental Questionnaire must include, in addition to the required areas of inquiry listed below, the following language with respect to false statements: “The undersigned owner(s) and/or operator(s) acknowledge(s) and agree(s) that intentionally falsifying or concealing any material fact with regard to the subject matter of this Environmental Questionnaire may, in addition to other penalties, result in prosecution under applicable law including 18 U.S.C. section 1001.”
Prudent lending practices dictate that an Environmental Questionnaire must include the address of the property and, at a minimum, inquire into the following areas:
- Past and present uses of the Property and Adjoining Properties, with particular attention paid to those uses by environmentally sensitive industries;
- Past and present identification of any Hazardous Substances at the Property and Adjoining Properties;
- Storage, generation, treatment, emission or disposal of Hazardous Substances at the Property and Adjoining Properties;
- Possession of permits to use, store, generate, treat, emit, or dispose of Hazardous Substances by businesses operating at the Property and Adjoining Properties;
- Evidence of Contamination at the Property and Adjoining Properties;
- Potential sources of Contamination at the Property and Adjoining Properties;
- Knowledge on the part of the Borrower, seller, or Lender of any past evidence of Contamination or sources of Contamination at the Property and Adjoining Properties;
- Knowledge on the part of the Borrower, seller, or Lender of any past, threatened or pending lawsuits or administrative proceedings concerning a Release or threatened Release at the Property and Adjoining Properties;
- Existence of any regulatory actions by any Governmental Entity for environmental conditions at the Property and Adjoining Properties;
- Identification of any previously performed environmental risk studies environmental documents pertaining to the Property (attach copies); and
- Presence of lead paint, asbestos, or Polychlorinated Biphenyls (“PCBs”) at the Property.
As an alternative, SBA will accept the ASTM questionnaire utilized for Transaction Screens (currently ASTM E1528-14) for all purposes that an EQ is required by this SOP. (ASTM licenses the use of these forms, which can be obtained through www.astm.org.)
What are your options for collecting data?
Scratch-Build Your Own SBA Environmental Questionnaire.
I’m not going to lie, this is not going to be easy and you might need professional help. The text above in the SOP which I turned Italic outlines what needs to be in your SBA environmental questionnaire.
Steal Borrow Someone Else’s SBA Environmental Questionnaire.
Google until you come up with some other bank’s Environmental Questionnaire. Then change the logos and heading. Make sure that it covers all the bullet points listed above. You can find a few examples here, here and here. The last one in those set of links is the closest to the SBA regulations.
Use the ASTM Transaction Screen Assessment SBA Environmental Questionnaire
You can download the Official SBA Environmental Questionnaire PDF which is the Transaction Screen Assessment E1528-14 Standard Practice PDF by clicking here. You can find the official TSA Environmental Questionnaire on page eight. Word of warning, it’s ugly.
Use A3E’s online SBA Environmental Questionnaire Form
Our SBA Environmental Questionnaire form can be found by clicking through this link. If you would like, you can copy our survey which is interactive and changes depending on who is answering the questions. We send questionnaires to both the buyer and seller of a property because we feel we get better information that way. The nice thing about this questionnaire is it bakes the responses into a PDF which we can include with our client’s file. If you’d like, we can help you make a questionnaire just like ours or you can have your clients use ours and we’ll forward you the data. If you are going to do a lot of loans it pays to use an online service like www.formsite.com. The answers to the questions are kept forever which is nice. We built our questionnaire to be adaptive so it asks the buyer and seller different questions. We feel it’s important from an environmental risk mitigation standpoint to send our survey to all the parties in a transaction. You never know who knows the most about a property and at the end of the day, we’re asking these questions to protect the collateral value of the property and the people lending money NOT to the buyer and seller.
If you need SBA Environmental Due Diligence like Records Search with Risk Assessment or Environmental Site Assessments, give A3E Consultants a call. We’ll work to get your project done with the utmost in confidentiality, we’ll meet or exceed ASTM Standard E1527-13 on any sort of commercial or industrial property. Our reports meet the requirements of all lenders and government agencies such as the Small Business Administration (SBA), Housing and Urban Development (HUD) and the United States Department of Agriculture (USDA). A3 Environmental Consultants can be reached at (888) 405-1742 or by email at Info@A3E.com.