Understanding SBA Records Search with Risk Assessment (RSRA)
When small businesses seek funding through the Small Business Administration (SBA) loan programs, environmental due diligence is often a necessary step. One of the most common initial assessments used in this process is the Records Search with Risk Assessment (RSRA). This cost-effective and efficient environmental screening tool helps lenders and borrowers identify potential environmental risks associated with a property before proceeding with a loan.
What is an SBA RSRA?
The RSRA is an environmental due diligence report that evaluates potential contamination risks based on historical and regulatory records. This assessment is primarily used for SBA 504 and SBA 7(a) loans to determine if further environmental investigation, such as a Phase I Environmental Site Assessment (ESA), is necessary.
RSRAs must comply with the SBA SOP 50 10 7.1, which outlines the requirements for environmental due diligence in SBA loans. This SOP mandates that an RSRA be conducted by a qualified environmental professional and must include a thorough review of records to identify potential environmental risks.
Unlike a full Phase I ESA, an RSRA does not require a site visit or interviews but instead relies on a thorough review of available records. The goal is to identify if there is a low, elevated, or high risk of environmental contamination that could impact property value and business operations.
What Does an RSRA Include?
An RSRA typically consists of:
- A review of federal, state, and local environmental regulatory databases
- A search of historical records such as fire insurance maps, city directories, and aerial photographs
- An assessment of adjacent and nearby properties for potential environmental concerns
- A written risk determination (low, elevated, or high)
Why is an RSRA Important?
For lenders and borrowers, an RSRA provides a quick and affordable way to assess environmental risks without committing to the time and expense of a full Phase I ESA. If an RSRA determines a low risk, the loan process can proceed without additional environmental assessments. However, if an elevated or high risk is identified, the SBA requires a Phase I ESA to further investigate potential contamination.
When is an RSRA Needed?
SBA SOP 50 10 7.1 requires an RSRA in cases where:
- The property type falls under NAICS codes with potential environmental concerns, such as mining, printing operations, various transportation operations, and manufacturing facilities, or multi-unit buildings.
- The site has a history of industrial or commercial use that might pose contamination risks.
- There is an unknown history, and an initial screening is necessary before moving forward with lending decisions.
- The SBA Environmental Questionnaire indicates potential environmental risks that require further investigation.
- Or, if the loan amount is greater than $250,000.
Leaaf Environmental’ s Expertise in SBA RSRAs
At Leaaf Environmental, LLC (Leaaf), we specialize in conducting SBA-compliant RSRAs to help lenders and borrowers navigate the environmental due diligence process with confidence. Our experienced team provides:
- Thorough research and analysis using the latest environmental records and historical data
- Accurate risk assessments to streamline the SBA loan approval process
- Guidance on next steps, whether it’s moving forward with the loan or recommending additional assessments
- Completion and review of the SBA Environmental Questionnaire to ensure compliance with SOP 50 10 7.1
If you’re applying for an SBA loan and need an RSRA, Leaaf is here to help. Contact us today to ensure your property meets all environmental due diligence requirements without unnecessary delays!
