{"ok":true,"canonical_url":"https://dealroom.so/glossary/environmental-risk","api_url":"https://dealroom.so/api/public/glossary/environmental-risk","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"environmental-risk","term":"Environmental Risk","group":"Reading the business","definition":"This is the potential for environmental contamination on or near the business property, which could lead to cleanup costs or legal liabilities. It's a critical concern for real estate-heavy businesses.","what_it_means":"For any deal involving real estate, or businesses with potential environmental impact, the SBA requires an Environmental Site Assessment. Identify potential risks early to avoid unexpected liabilities or delays in closing your loan.","url":"https://dealroom.so/glossary/environmental-risk","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"environmental-site-assessment","term":"Environmental Site Assessment","url":"https://dealroom.so/glossary/environmental-site-assessment"},{"slug":"recognized-environmental-condition","term":"Recognized Environmental Condition","url":"https://dealroom.so/glossary/recognized-environmental-condition"},{"slug":"phase-i-environmental-site-assessment","term":"Phase I Environmental Site Assessment","url":"https://dealroom.so/glossary/phase-i-environmental-site-assessment"},{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"}],"related_questions":[{"question":"If a business acquisition includes real estate with known environmental risks, can it still be financed?","url":"https://dealroom.so/sba-7a/questions/if-a-business-acquisition-includes-real-estate-with-known-environmental-risks-can-it-still"},{"question":"When a Phase I Environmental Site Assessment (ESA) identifies a Recognized Environmental Condition (REC), what are the lender's subsequent responsibilities?","url":"https://dealroom.so/for-lenders/questions/when-a-phase-i-environmental-site-assessment-esa-identifies-a-recognized-environmental-con"},{"question":"If a Phase I Environmental Site Assessment (ESA) identifies Recognized Environmental Conditions (RECs), what are the next steps for a lender?","url":"https://dealroom.so/for-lenders/questions/if-a-phase-i-environmental-site-assessment-esa-identifies-recognized-environmental-conditi"},{"question":"When is an Environmental Questionnaire (e.g., Form 1081) sufficient for real estate collateral, without requiring a Phase I Environmental Site Assessment (ESA)?","url":"https://dealroom.so/for-lenders/questions/when-is-an-environmental-questionnaire-e-g-form-1081-sufficient-for-real-estate-collateral"},{"question":"What are a lender's responsibilities if a Phase I Environmental Site Assessment (ESA) identifies a Recognized Environmental Condition (REC) but recommends no further action?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-responsibilities-if-a-phase-i-environmental-site-assessment-esa-identi"},{"question":"What environmental due diligence is mandatory for real estate collateral?","url":"https://dealroom.so/sba-7a/questions/what-environmental-due-diligence-is-mandatory-for-real-estate-collateral"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Environmental Risk","url":"https://dealroom.so/glossary/environmental-risk","source_type":"DealRoom Data"}}