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September 19, 2021

Environmental Remediation Escrow Agreement

Filed under: Uncategorized — Mark Baker @ 12:04 am

The SBA does not offer any form of environmental trust agreement and the SOP provides very limited guidance on what should be included in an environmental trust agreement. The SOP states that the agreement should ensure that trust funds are only used to cover renovation costs. The lender must have control of the trust account, can only release funds after the satisfactory completion of the reorganization, including receipt of a “close” letter or a no Further action letter, if applicable. The environmental trust account should not be allocated to the proceeds of the SBA loan. When negotiating the environmental trust agreement, it is important for lenders to consider and incorporate terms that comply with federal and federal environmental laws. Otherwise, the lender could be held liable for significant remediation costs. .

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