Last week, we shared a newsletter on environmental due diligence guidance for SBA loan originations (click here to read). To continue on this topic, in this newsletter we are providing environmental guidance for SBA loan foreclosures and liquidations.
Earlier this year, the SBA issued Procedural Notice 5000-866054 Update to SOP 50 10 7.1 Section A, Chapter 5, Paragraph E, Environmental Policies and Procedures with an effective date of March 20, 2025. Click here to access on the SBA website. More recently, the SBA issued Procedural Notice 5000-869245 Revisions to SOP 50 56 related to Environmental Reviews and Permanent ALP Express Authority with an effective date of September 15, 2025. Click here to access on the SBA website.
When it comes to foreclosure and liquidation of commercial real estate pledged as collateral for SBA 7(a) loans, it is recommended that lenders engage the services of experienced environmental experts to ensure compliance with SBA’s environmental risk management requirements set forth in SOP 50 57. A nationally recognized SBA environmental specialist, Outsourced Risk Management Solutions (“ORMS”), recently published “Plan Ahead to Avoid Environmental Headaches in Foreclosure and Liquidation”, click here to read more or contact Derek Ezovski, President, at dezovski@orms.com.
If your lending institution has questions about the SBA environmental risk management requirements, or any other SBA lending matters, please contact us at SBAQuestions@JellumLaw.com.