SBA SOP 50 10 8.1, App7 — Requirements Pertaining to Gas Station Loans

SOP 50 10 8.1 App7

Effective 2026-10-01 · publisher's stamp for this provision

Appendix 7: Requirements Pertaining to Gas Station Loans Environmental Investigation Requirements for Gas Station Loans NOTE: SBA Lenders are reminded that documentation associated with gas station loans can be voluminous and complex. The Environmental Investigation requirements set forth below apply to all loans secured by a lien or security interest on real property (a fee simple or leasehold mortgage, deed of trust, etc.) or personal property (gas station fixtures or equipment such as tanks, pumps, lines, etc.) currently used to operate a gas station or commercial fueling facility ("Gas Station Loans"). These requirements would not apply when the applicant operates a business, such as a convenience store associated with a gas station, in which the applicant only leases the real or personal property and neither the real nor personal property is used as collateral for the loan. Nor do these requirements apply to situations where the only collateral for the loan is something other than gas station equipment (for example, food inventory, shelving, etc.). A. Environmental Site Assessment. The Environmental Investigation for all Gas Station Loans (including those secured by gas station equipment only) must: 1. Begin with a Phase I ESA with the additional requirement that it be conducted by an independent Environmental Professional; 2. Include an analysis of all relevant environmental records concerning the Property and Adjoining Properties, including any records provided by the seller if the loan is to purchase the Property; 3. Include documentation supporting the Environmental Professional’s determination of compliance with all regulatory requirements, if any, pertaining to tank and equipment testing (see Paragraph B. below) (even if the loan is secured by real property); 4. Include the results of any further investigation, which may include a Phase II, recommended by the Environmental Professional (Any Phase II performed in connection with a Gas Station Loan must be conducted by an independent Environmental Professional who holds a current Professional Engineer’s or Professional Geologist’s license and has the equivalent of 3 years of full time relevant experience.); and 5. If the Property is Contaminated, include a detailed description of and cost estimate for the recommended Remediation. B. The Environmental Investigation performed by the Environmental Professional must include a determination whether the gas station is in compliance with all regulatory requirements, if any, pertaining to tank and equipment testing. A loan may not be disbursed until full compliance is achieved. Further, any leaking or otherwise defective equipment, systems, containment devices, etc., must be replaced or repaired prior to disbursement. C. Results of Environmental Investigation. 1. Property is not Contaminated. If the Environmental Professional concludes that the Property is not Contaminated, (except on PLP, 7(a) Small Loans, SBA Express, Export Express, and PCLP loans) it is the SBA Lender’s responsibility to certify in the SBA Loan System that the Property complies with all SBA environmental requirements in this SOP (which includes the additional requirements of this Appendix), and the SBA Lender must maintain the Environmental Investigation Reports(s) in the SBA Lender’s loan file. 2. Property is Contaminated. If the Environmental Professional concludes that the Property is Contaminated, the SBA Lender can either: a. Decline the loan; or b. Follow the requirements in Section A, Ch. 5, Para. E.5, Property Contamination or Remediation,” provided that at a minimum, in change of ownership situations, the SBA Indemnification Agreement as described in Section A, Chapter 6, E.6.d.i, Indemnification, must always be obtained and signed by the seller. (There may be situations where it is not practical to require the seller to sign the indemnification agreement; for example, the property is being sold from a probate estate or through a trustee in bankruptcy. Waivers may be sought from the SBA Environmental Committee at EnvironmentalAppeals@sba.gov on a case-by-case basis. A mere unwillingness on the part of a seller to execute the indemnification agreement is not a sufficient basis for a waiver. PLP, 7(a) Small, SBA Express, and Export Express Lenders and PCLP CDCs do not have the authority to grant a waiver and are also required to follow this procedure.) In addition, prudent lending practices may require an SBA Lender to utilize some of the other listed mitigating factors such as requiring additional collateral. D. When Waiver and Release of Right to Indemnification from SBA/SBA Lender Required. If any oil company or other Person (as defined in Appendix 4) has a right to indemnification from subsequent owners of the Property (e.g., SBA/SBA Lender after acquiring Property through foreclosure or other means), then they must execute either the SBA Indemnification Agreement or another document in which they waive all known and unknown rights and release all claims and causes of action whether now or hereafter in existence against SBA and SBA Lender related to Contamination at the Property including the right to indemnification. The document containing the waiver and release must be recorded. 7(a) Lenders, except when processing a loan under delegated authority, and CDCs, including PCLP CDCs, must submit all waiver and releases to EnvironmentalReviews@sba.gov and upload these documents to the SBA Loan System, along with a copy of the title report, the document providing for indemnification, and the purchase and sale documents, if any.

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