The Small Business Administration (SBA) requires borrowers to obtain an SBA Reliance Letter from the environmental professional who performed the Environmental Site Assessment (ESA) in order to qualify for a loan. The SBA Reliance Letter provides the SBA with the assurance that the ESA was performed in accordance with the SBA’s environmental standards and that the environmental professional is willing to stand behind their work.
What is an SBA Reliance Letter?
An SBA Reliance Letter is a legal document that authorizes the SBA to rely on the findings of an ESA report. The SBA Reliance Letter must be signed by the environmental professional and the borrower.
The SBA Reliance Letter typically includes the following information:
- A statement that the environmental professional is qualified to perform ESAs
- A statement that the ESA was performed in accordance with the SBA’s environmental standards
- A statement that the environmental professional is willing to stand behind their work
Why is an SBA Reliance Letter required?
The SBA requires an SBA Reliance Letter to ensure that the ESAs performed for its borrowers are of high quality and that the SBA can rely on the findings of the ESA reports. The SBA Reliance Letter also helps to protect the SBA from environmental liabilities.
When is an SBA Reliance Letter required?
An SBA Reliance Letter is required for all SBA loans that are secured by real estate loan. This includes 7(a) loans, 504 loans, and CDC/504 loans.
How to obtain an SBA Reliance Letter?
To obtain an SBA Reliance Letter, you will need to contact an environmental professional who is qualified to perform ESAs and who is familiar with the SBA’s environmental standards. The environmental professional will perform an ESA on the property that you are seeking to finance with an SBA loan. Once the ESA is complete, the environmental professional will prepare an SBA Reliance Letter.
Tips for obtaining an SBA Reliance Letter
Here are a few tips for obtaining an SBA Reliance Letter:
- Start early. The environmental professional may need several weeks to complete the ESA and prepare the SBA Reliance Letter.
- Be clear about your needs. Let the environmental professional know that you need an SBA Reliance Letter.
- Provide the environmental professional with all of the necessary information. This includes the address of the property, the type of loan you are seeking, and the lender you are working with.
- Review the SBA Reliance Letter carefully before you sign it. Make sure that the information in the letter is accurate and that you understand all of the terms and conditions.
Sample SBA Reliance Letter
Here is a sample SBA Reliance Letter:
SBA Reliance Letter
I, [Environmental Professional Name], am a qualified environmental professional who has performed an Environmental Site Assessment (ESA) on the property located at [Property Address]. The ESA was performed in accordance with the SBA’s environmental standards.
I am willing to stand behind my work and I hereby authorize the SBA to rely on the findings of the ESA report.
Sincerely, [Environmental Professional Signature]
Conclusion
The SBA Reliance Letter apply is an important document that is required for all SBA loans that are secured by real estate. The SBA Reliance Letter provides the SBA with the assurance that the ESA was performed in accordance with the SBA’s environmental standards and that the environmental professional is willing to stand behind their work.
If you are seeking an SBA loan, be sure to contact an environmental professional who is qualified to perform ESAs and who is familiar with the SBA’s environmental standards. The environmental professional will be able to assist you in obtaining an SBA Reliance Letter.
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