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 Attorney Spotlight |
Christopher M. Evans, Esq. | |
Chris' areas of practice include commercial lending, finance, real estate and corporate law. As a closing attorney for commercial lenders, he drafts, analyzes, and negotiates documents for conventional loans and government guaranteed loans through the SBA 7(a) and 504 loan programs. Chris also reviews SBA guaranteed and conventional loan files and advises on due diligence documentation.
Chris counsels small businesses in several contexts, including mergers and acquisitions, entity formation, corporate governance, and real estate matters. He has drafted and reviewed purchase agreements, organizational documents, corporate resolutions and minutes, and advises on regulatory and licensing matters at both the state and federal levels.
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 | Did you know... |
...that Starfield & Smith, P.C. will be exhibiting at the 2010 NAGGL Annual Conference?
Stop by our booth (#22) to learn more about the services Starfield & Smith provides for its lender clients nationwide.
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| Best Practices: Environmental Investigations
By Jessica L. Conn, Esq. | |
Jessica L. Conn, Esq. |
Under the SOP, the SBA requires a lender to perform an environmental investigation for all commercial property that will secure an SBA loan. The type of investigation is dependent on the level of risk of contamination. For GP loans, the lender must submit the environmental investigation report to the SBA for approval.
In order to determine the type of environmental investigation that is appropriate for a particular transaction, the lender should begin by establishing the NAICS code(s) that best describes the property's "current and known prior uses." If the NAICS code matches an environmentally sensitive industry listed in Appendix 4 of SOP 50 10 5(B), then the lender's environmental investigation must begin with a Phase I, regardless of the loan amount. If there is not a NAICS code match, than then investigation may begin with an environmental questionnaire for loans of $150,000.00 and under. For loans over $150,000 where there is no NAICS code match, the investigation must begin with an environmental questionnaire and records search with risk assessment, at the very least. The following is a brief description of the various types of environmental investigations:
- ENVIRONMENTAL QUESTIONAIRRE ("EQ"): The EQ is created by the lender, as the SBA does not currently have a form that is required to be used. There are, however, certain standards that the lender's EQ must meet:
- The EQ 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.
- The current owner or operator must sign the EQ. If the current owner or operator refuses to sign, then the lender must obtain a transaction screen.
- There are several inquiries that the SOPs require be included in the questionnaire, including but not limited to, the past and present uses of the property and adjoining property, identification of hazardous substances, and evidence of contamination on the property and adjoining properties. The full list of required inquiries can be found in Appendix 2 of SOP 50 10 5 (B), pg. 329.
RECORDS SEARCH WITH RISK ASSESSMENT ("RSRA"): A RSRA is includes:
- A search of government databases for a compliant Phase I and a search of historical use records for the property and adjoining properties, and
- A risk assessment by an environmental professional as to the level of risk for contamination based on the search. The report must identify the environmental professional by name, but a reliance letter is not needed.
TRANSACTION SCREEN ("TS"): A TS is an investigation compliant with the standards set by ASTM International that includes:
- An interview with the owner or operator of the property,
- A visit to the property
- Completion of an environmental questionnaire, and
- A review of government records and historical sources.
PHASE I: A Phase I is an investigation compliant with the Phase I standards set by ASTM International that contains an opinion of an environmental professional regarding the presence of contaminants and the risk involved with such contaminants. The environmental professional should provide a recommendation of how to proceed, if they conclude that further investigation is warranted.
If the results of any particular environmental investigation are that further investigation is warranted, the SOP 10 50 5 (B) sets forth guidelines as to what the next stage of investigation should be. You can find a chart that outlines the various types of environmental investigation and SBA recommendations here.
It is crucial that lenders follow the guidelines set forth by the SBA in their environmental investigations in order to protect the SBA guaranty and the lender's lien on the commercial real estate. For more information on this and other SBA related topics, contact Jessica Conn at jconn@starfieldsmith.com or 215-542-7070. |
| Upcoming Seminars and Events |
Fundamentals of SBA Lending: Documenting, Closing and Funding the SBA Loan
Dates: September 9th, 2010
Time: 1:00 pm EST - 2:30 pm EST
Location: Webinar
SBA lending affords banks and other lending institutions with the opportunity to finance commercial loans to small businesses and, at the same time, secure a loan guarantee from the federal government. While the program can be quite profitable, it's not without its risks. Compliance with SBA regulations is mandatory to ensure success and profitability. With changes occurring to the program over the last year, it is critical to understand the new regulations and the way to make the SBA loan programs work for you.
Register online here.
Or call 1-866-352-9539
When registering, use priority code 15800 and discount code F2716129.
SBA Guaranty Purchase Workshop
Dates: September 14th, 2010
Time: 11:00 pm EST - 5:00 pm EST
Location: Herndon, VA
This workshop is structured so you will learn what SBA lenders must be doing in 2010 and beyond to maximize the successful process of their guaranty purchase packages. You will learn tips on how to submit a solid SBA guaranty repurchase package and how Lender's can sharpen their SBA guaranty purchase skills.
You can find an agenda for this workshop here. Register by mail or fax using this form.
Fundamentals of SBA Lending: Documenting, Closing and Funding the SBA Loan
Dates: September 21st, 2010
Time: 1:00 pm EST - 2:30 pm EST
Location: Webinar
SBA lending affords banks and other lending institutions with the opportunity to finance commercial loans to small businesses and, at the same time, secure a loan guarantee from the federal government. While the program can be quite profitable, it's not without its risks. Compliance with SBA regulations is mandatory to ensure success and profitability. With changes occurring to the program over the last year, it is critical to understand the new regulations and the way to make the SBA loan programs work for you.
Register online here.
Or call 1-866-352-9539
When registering, use priority code 15800 and discount code F2716129.
Closing and Funding the SBA Loan
Dates: September 21st, 2010
Location: St. Louis, MO
This session is for those who prepare loan closing documentation and coordinate key people and events in the loan closing meeting. The following topics are on the agenda: SBA standardized Loan Authorization; SBA closing forms; SBA closing requirements; due diligence and checklist; lender documentation: securing the loan; and tracking the loan proceeds.
Register online here.
Dates: September 22nd, 2010
Location: St. Louis, MO
On September 22, 2010, at the NAGGL SBA 7(a) Lender Training in St. Louis, Missouri, David Starfield will present the "Advanced SBA Loan Documentation and Closing" course. This session is designed to help lenders ensure that the documents they assemble comply with the SOPs, the loan authorization and sound lending practices. Topics will include key loan closing issues; tax, lien and judgment searches; third parties; loan modification issues; franchise agreements and affiliation issues; and more.
Register online here.
Dates: October 25th, 2010
Location: Anaheim, CA - NAGGL Annual Conference
The Advanced SBA Loan Documentation and Closing course is designed to help lenders ensure that the documents they assemble comply with the SOPs, the loan authorization and sound lending practices. Topics will include key loan closing issues; tax, lien and judgment searches; third parties; loan modification issues; franchise agreements and affiliation issues; and more.
Register online here.
The Guarantee Purchase Process
Dates: October 25th, 2010
Location: Anaheim, CA - NAGGL Annual Conference
Do you need to make an SBA guarantee repurchase? You won't want to miss this informative course. The steps to follow when making a request for payment on an SBA guarantee and preparing the 10-tab purchase package for submission to the SBA will be explored. If your repurchase request is denied, learn how to work with the SBA and have your request paid.
Register online here.
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 Starfield & Smith, P.C.Pennsylvania Office
501 Office Center Drive, Suite 350 | Ft. Washington, PA 19034
phone: (215) 542-7070 | fax: (215) 542-0723
Minnesota Office
1516 West Lake Street, Suite 303 | Minneapolis, MN 55408
Loan Documentation | Closing | SBA Guaranty Repurchase
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