SBA reliance letter

Appendix 5 of the Small Business Administration's (SBA) Standard Operating Procedure (SOP) 50 10 8.1 is SBA's standard Reliance Letter: the Environmental Professional's letter that lets the lender and SBA rely on an Environmental Investigation, with terms on insurance, waivers, impartiality and false statements. Every Transaction Screen, Phase I and Phase II on a 7(a) or 504 loan must come with it, and its wording may not be changed. This page rests on SOP 50 10 8.1 with Technical Policy Updates, effective October 1, 2026. SBA's lists of procedural and information notices, read October 16, 2026, show none issued after it whose title touches its environmental policies.

Who the rule binds

Which reports. Every Transaction Screen, Phase I and Phase II Environmental Site Assessment (ESA) must be the work of an Environmental Professional and come with the Appendix 5 letter, even where the report is addressed to the SBA Lender (SOP 50 10 8.1, Section A, Ch. 5, Para. E, Submission of Environmental Investigation Reports). A Records Search with Risk Assessment need not be addressed to SBA and needs no Reliance Letter (SOP 50 10 8.1, Appendix 4, Records Search with Risk Assessment).
No changes. The letter's language may not be modified, and lenders and certified development companies (CDCs) should not agree to anything that changes its terms (SOP 50 10 8.1, Appendix 4, Reliance Letter).
Who signs. The Environmental Professional always signs. Where a firm employs or retains the professional, one of its authorized representatives signs too (SOP 50 10 8.1, Appendix 5).
Who decides. The duty falls on every SBA Lender however the loan is processed; exceptions to SBA's environmental policies are for its Environmental Committee (SOP 50 10 8.1, Section A, Ch. 5, Para. E).

What it asks

The letter, part by part (SOP 50 10 8.1, Appendix 5):

Heading. On the letterhead of the professional or the firm, dated, addressed to the SBA Lender by name and address and to SBA, and giving the Borrower's name, the Property's address and the Environmental Investigation Report number or numbers.
The professional and the work. The named professional states that they meet the definition of an Environmental Professional at 40 CFR 312.10(b) and performed or supervised each investigation checked.
Three boxes. A Transaction Screen, under the latest ASTM International standard (currently ASTM E1528-22). An original or updated Phase I, under the latest standard (currently ASTM E1527-21), with a statement that the professional has addressed the additional inquiries' performance under 40 CFR 312.22. A Phase II under generally accepted industry standards of practice, with a scope of work reasonable and sufficient to show whether a Release is present, its nature and its extent as it affects the Property. Each box gives the report's date and takes in any addenda.
Reliance. The professional, and the firm where there is one, acknowledge that the Property may secure an SBA-guaranteed loan conditioned on an Environmental Investigation by an Environmental Professional. They authorize the lender and SBA to use and rely on the investigation, and to give the Borrower a copy for information purposes only.
Not an update. The letter neither updates nor modifies the investigation, and the professional neither represents nor warrants, expressly or impliedly, that the Property's condition on the letter's date is the same as, or similar to, the condition the investigation describes.
Insurance. The professional or the firm certifies that, as of the investigation's date, it was covered by errors and omissions liability insurance of at least $1,000,000 per claim (or occurrence), with evidence attached. As to the lender and SBA, it waives any dollar limit on liability up to $1,000,000, and any time limit on liability except state or Federal statutes of limitation.
Indemnification. The professional and the firm waive any right to be indemnified by the lender or SBA.
Impartiality. The professional certifies that, to the best of their knowledge, they are independent of the seller, the Borrower, the operating company and any person in which the seller holds an ownership interest, and not a representative, employee or affiliate of any of them; and that no one unduly influenced the investigation's preparation or contents.
False statements. The signers acknowledge and agree that intentional falsification or concealment of a material fact about the letter or the investigations may, beyond other penalties, lead to prosecution under applicable laws, 18 U.S.C. § 1001 among them.
Signatures. The professional's, with printed name; a firm representative's, with printed name, title and firm; evidence of insurance enclosed.

What it means for the Phase I and the consultant

The additional inquiries are the user's. Part 312 puts the inquiries of 40 CFR 312.22 on persons seeking the innocent landowner, bona fide prospective purchaser or contiguous property owner protections, and on certain grant-funded assessments, and lets them pass the results to the professional (40 CFR 312.1(b), 312.22(a)). The Phase I standard calls them user tasks, has the professional ask for the results, and has the report say whether the user gave any (E1527-21, 6.1, 7.3.2). The letter's Phase I box has the professional state that their performance was addressed.
The insurance and impartiality terms appear twice. SBA's definition of the Environmental Professional already requires impartiality and errors and omissions coverage of at least one million dollars per claim (or occurrence) (SOP 50 10 8.1, Appendix 4, Environmental Professional). The Phase I standard lets the professional be an independent contractor or the user's employee (E1527-21, 3.2.30).
Reliance is outside the standard. E1527-21 leaves the contractual and legal obligations between professional and user outside its scope (E1527-21, 4.9), and its optional user questionnaire lists, among information to provide if available, every party that will rely on the report (E1527-21, X3.1, X3.1.5). For SBA loans the reliance terms are the letter's, and lenders and CDCs should not agree to alter them (SOP 50 10 8.1, Appendix 4, Reliance Letter).
Dating is a separate test. Because the letter is not an update, the report it covers must meet SBA's dating rule on its own (SBA Phase I requirements).

What the rule says

Persons identified under § 312.1(b) must conduct the inquiries listed in paragraphs (a)(1) through (a)(4) below and may provide the information associated with such inquiries to the environmental professional responsible for conducting the activities listed in § 312.21

40 CFR 312.22(a), edition revised as of July 1, 2025

a person who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding conditions indicative of releases or threatened releases (see § 312.1(c)) on, at, in, or to a property, sufficient to meet the objectives and performance factors in § 312.20(e) and (f).

40 CFR 312.10(b), edition revised as of July 1, 2025

This page is general reference for environmental professionals. It does not review any loan or project. The regulation and SBA's Standard Operating Procedure are the authority, and the determinations of SBA, or of the lender acting under the authority SBA delegates, govern.