Recently, several of our lending clients have begun to use EZ-Screen as their primary environmental risk screening tool, and it has really paid off for them. I'd like to share two such stories with you today.
1) A refinance deal: the owner was shopping for a large refi loan on a 100 year old factory building, now a profitable restaurant. The owner did not have a previous Phase I done when they bought the property.
Our EZ-Screen review identified old contamination on the property. Even worse, ongoing operations at the property had been exacerbating the contamination for about 15 years, spreading it around and making it worse.
It is a huge potential liability problem.
We provided some analysis of the problem to the lending specialist.
Their loan committee discussed our findings for several weeks, and after consulting with their legal counsel, finally decided to pass on the loan. There is probably a million dollars worth of environmental exposure there, and this small lender was smart to pass it up.
Their loan committee discussed our findings for several weeks, and after consulting with their legal counsel, finally decided to pass on the loan. There is probably a million dollars worth of environmental exposure there, and this small lender was smart to pass it up.
2) In a second recent case, we were asked to EZ-Screen a property.
The lender was told that the property had never been occupied or developed, and that no previous environmental report was available.
EZ-Screen quickly revealed some important information: there had been several different iterations of a gas station on the property. Eventually, we found some old reports on the property
Surprise! Nothing to be afraid of. The documentation showed that the property had never been impacted by environmental contamination.
The loan was quickly made and everyone was happy.
Both of these happy outcomes were facilitated by the bank's decision to use EZ-Screen as their first-line screening tool for all real estate collateral. At less than $300 and less than 24 hours, it streamlines the process and is painlessly passed on as a closing cost. No competitor comes close to this value.
- In the first case, the alternative would have been a $2000 Phase I ESA which would have taken several weeks.
- In the second case, no environmental work would have been done it all, under that lender's policy, since it was a low cap loan.
Both of these lenders now use our EZ-Screen as an across the board means of assessing their risks better and more efficiently. This makes them more competitive and at the same time gives them stronger portfolios.
An additional benefit of EZ--Screen is that the risk decisions are being made by an outside third party trained environmental professional with the resources and background to make the call. Our lender and loan committee clients tell us they are uncomfortable in the role of environmental risk evaluator, especially at smaller institutions. This is an affordable way for them to stay very competitive with the bigger banks, and keep sub par contaminated or risky collateral off of their balance sheet.
If you believe that this low level screening process can be beneficial for your lending process, feel free to give us a call.
EZ-Screen is specifically designed to avoid all conflicts of interest:
EZ-Screen is specifically designed to avoid all conflicts of interest:
- Using EZ-Screen™ as the first step on every deal eliminates the possibility of most or all conflicts of interest, and thus puts you in a better light in your customer's eye.
- Plus, it's a great value.
- Learn about EZ-Screen "Clean or Free" advantage here.
- Just keeping these things in mind can make a big difference in your ability to guide the process away from conflicts.
- Review your organization's environmental policy and make changes where applicable.
- If your organization does not have a formal environmental policy, consider using the SBA's environmental policy as a template - even on non-SBA deals.
- It won't address all the conflicts of interest discussed in this article, but it's a good starting point if you've got nothing else.
- If you're uncomfortable reviewing and changing policy on your own, or just want to have a second set of eyes on it, having your attorney review it is a great idea. This can identify and possibly mitigate potential conflicts, among many other things.
About Us
Our clients tell us that they won't entrust their environmental risk decisions with anyone else.
Give us a try on your next project and find out what they mean.
To EZ-Screen your next deal, simply visit our order portal.
To ask a question, email us here, or call (800) 769-SIERRA
