Glossary · Reading the business
Hazardous material
In short
These are substances that pose a risk to health or the environment. Buyers need to know if a business has them because remediation costs can be enormous and legally binding.
What it means in a deal
For any business with real estate or certain operations, the lender will require an Environmental Questionnaire. If red flags arise, you might need a Phase I Environmental Site Assessment, and potentially a Phase II if contamination is suspected. Factor potential cleanup costs into your deal structure.
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 Hazardous material
- What additional environmental due diligence is required for a 7(a) loan if the business handles hazardous materials?
- What are the consequences if SBA Form 1919 contains material omissions or misrepresentations?
- Can a lender approve a material change to collateral without prior SBA approval?
- What constitutes a 'material adverse change' that could affect my loan approval after application?
- Which material servicing actions can a 7(a) lender take without prior SBA approval?
- How does an unapproved material servicing action impact the SBA's 7(a) loan guaranty?
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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