Glossary · Doing the deal
flood hazard determination
In short
A report determining if a property is located in a Special Flood Hazard Area (SFHA) as designated by FEMA. This is a required step for all SBA 7(a) loans.
What it means in a deal
Your lender will order this report early in the closing process. If the determination identifies the property as being in an SFHA, flood insurance will be a mandatory condition for your loan closing. Plan for the potential cost and time involved in securing this insurance.
Official sources
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.
Related terms
Common questions about flood hazard determination
- What environmental due diligence is required for real estate collateral located in a flood hazard area for a 7(a) loan?
- What constitutes 'common management' triggering affiliation for SBA 7(a) size determination?
- When does a prior contractual relationship create affiliation for 7(a) size determination?
- When does identity of interest trigger affiliation for size determination under SBA rules?
- How does ownership of options or warrants affect affiliation determination for SBA size standards?
- How do shared administrative services, like HR or accounting, automatically trigger affiliation for size determination?
Defined by CapBench 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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