Glossary · Reading the business
In short
The presence or likely presence of hazardous substances or petroleum products on a property. For a buyer, RECs trigger environmental due diligence to assess potential clean-up costs and liabilities.
An SBA loan requires an Environmental Questionnaire. If that raises red flags, a Phase I Environmental Site Assessment is performed. If the Phase I identifies RECs, a Phase II Environmental Site Assessment may be required to determine the extent of contamination. This directly impacts the property's value and your liability as the new owner.
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.
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