You’ve been told you need to have a Phase I Environmental Site Assessment (ESA) and now may be looking for answers to the questions:
- Why you need one
- Where you get them
- How much they cost
- How long do they take
- Will it meet the Small Business Administration (SBA) environmental requirements .
When ordering a Phase I Environmental Site Assessment (ESA) you want to make sure that:
- It is AAI (All Appropriate Inquiry) compliant, and conforms to ASTM 1527 05
- The environmental firm maintains certain levels of liability insurance (required by the SBA for SBA 7a and SBA 504 loans)
- The environmental firm will sign the latest Reliance Letter required by the SBA
- The environmental firm understands the latest environmental requirements outlined in the Small Business Administration’s Standard Operating Procedures (SOP), for year 2011 this would mean SOP 5010 5 (C)– valid through November 15th 2011
- The Environmental Firm that you choose is approved by your lender
Why Do I Need a Phase I Environmental Site Assessment (ESA)?
The purpose of an Environmental Site Assessment (ESA) is to identify any existing environmental contamination on the subject property. You as a buyer do not want to unwillingly become financially responsible for the prior environmental practices on the subject property. An ESA saves you from assuming liability for existing contamination and the costs of remediation (if needed). A Phase I ESA provides a current and historical record search as well as a site visit and inspection by a trained and certified Environmental Professional. The Environmental Professional’s job is to provide you with a report of the property site that informs you that either the site is clean, or there are Recognized Environmental Conditions (REC’s) that exist.
Where Do I Get a Phase I Environmental Site Assessment (ESA)?
Your banker can suggest some names of Environmental Firms that are on the bank’s approved lists. In cases where no recommendations are given, you can search the Internet for Phase I Environmental Site Assessments.
How Much Will a Phase I Environmental Site Assessment (ESA) Cost?
Typically you can expect to pay between $2,000 and $3,000 depending on the property.
How Long Does it Take to have a Phase I Environmental Site Assessment performed?
The average turn around time for a Phase I Environmental Site Assessment is three (3) to four (4) weeks. Many firms can provide rush jobs as well.