Glossary · Reading the business
Hazardous material use
In short
This refers to the handling, storage, or disposal of any materials that pose a risk to health or the environment. It triggers environmental review and potential liability for the buyer.
What it means in a deal
If the business uses or stores hazardous materials, even common ones like cleaning chemicals or automotive fluids, it immediately raises environmental concerns. You need to investigate past and present compliance with environmental regulations, permits, and disposal practices. Undiscovered contamination can lead to massive cleanup costs and personal liability post-closing.
Official sources
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 use
- 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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