Glossary · Reading the business
In short
A study to identify potential environmental contamination or hazards on a property, typically a Phase I ESA. Buyers care because the SBA requires this for certain properties, and contamination can create significant liabilities and costs for the new owner.
For real estate involved in the deal, especially properties with "environmentally sensitive" NAICS codes or past uses, a Phase I Environmental Site Assessment (ESA) is mandatory. If the Phase I identifies Recognized Environmental Conditions (RECs), a more in-depth Phase II ESA might be required. Budget for these costs and understand any remediation implications.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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