Glossary · Reading the business
In short
This is a review of a property to identify potential environmental contamination or hazards. It's required for commercial real estate transactions and SBA loans involving real estate.
The SBA requires an environmental investigation for properties securing a loan. You'll typically get an Environmental Questionnaire, and if red flags appear (Recognized Environmental Condition), a Phase I Environmental Site Assessment, or even a Phase II, will be required. These protect you from inheriting costly clean-up liabilities and are non-negotiable for real estate collateral.
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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