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SBA Records Search with Risk Assessment

Evaluate environmental risk quickly and economically with a quality RSRA report.

Partner is truly an expert at Small Business Administration (SBA) environmental due diligence for the SBA 7(a) Loan Program & the SBA 504 Loan Program, including the Records Search with Risk Assessment (RSRA) report. The SBA accepts Records Search with Risk Assessments in lieu of a Phase I Environmental Site Assessment (ESA) for property uses that do not match one of the NAICS codes of environmentally sensitive industries (higher risk properties). The RSRA report is an inexpensive due diligence product that allows the lender to evaluate environmental risk quickly.

When to Order a RSRA Report

If the property type is not listed on the NAICS code list of environmentally sensitive industries and the loan value is over $250,000, you can begin your environmental investigation with a Records Search with Risk Assessment, as shown in the SBA SOP Decision Tree (Flowchart). When a RSRA is ordered, the lender is required to do a site visit and fill out an Environmental Questionnaire (EQ) with the owner/occupant and submit that along with the RSRA report to the SBA. If the loan amount is under $250,000 (and the property type is not found on the NAICS code list), then the lender does not have to start with a RSRA and instead can start with just an Environmental Questionnaire.

What does a RSRA Report include?

The Records Search with Risk Assessment includes:

  •     A review of government and historical records
  •     The property’s NAICS code and
  •     A completed SBA Environmental Questionnaire for environmentally sensitive operations on the subject property or nearby properties.

All of this information is reviewed and analyzed by an Environmental Professional, who determines whether the property is “high risk” or “low risk” for contamination. When a RSRA report indicates “high risk”, the SBA requires that the lender must then proceed to a Phase I ESA.

Non-SBA Use of the RSRA Report

A Records Search with Risk Assessment can also used on non-SBA loans or by non-SBA lenders as a risk-screening tool as part of a well-rounded environmental risk management policy, and many lenders do so. The RSRA has advantages over other commonly-used risk screening tools, such as ordering only a government records search report. This is because the RSRA provides additional historical records and an Environmental Professional’s review and opinion. It is also a lower-cost alternative to risk screening reports that require a site visit by the environmental consultant, such as the Transaction Screen Assessment.