Construction Draw Inspections

September 12, 2009

Construction Draw Inspections are required by most lenders prior to funding a construction loan payment request.  Monthly site inspection provides the lender assurance that the contractor’s payment request is commensurate with progress.  The construction inspector will evaluate the accuracy of each line item of the contractor’s construction draw request.  The inspector will verify quantities or materials delivered and progress of each subcontractor.  

Partner Engineering and Science’s construction monitoring site visits include interviews with the project managers and developers, a review of the contractor’s payment request and subcontractor invoices, and evaluation of the representations each line of the contractor’s draw request.

Partner Engineering and Science provides construction monitoring services as well as plan review at the beginning of the project.  Our construction managers, engineers, and architects can help lenders understand the developers proposed construction budget.   Most lenders require regular site visits to provide a quality overview of project status.  

Partner’s Building Science practice includes commercial building inspections, Property Conditions Assessment, phase I environmental site assessments, engineering inspections, and Probable Maximum Loss reports.

For information on Partner’s Construction Draw Inspections contact Terry Dungan ( ) or 800-419-2349.

We review all change orders and address budget changes.  We typically respond within days of receiving a request and can cover all 50 states.  Partner will work with the general contractors, developers and lenders to schedule our inspections quickly and deliver a quality report within three to four days of the site visit.  No other firm can provide consistent Construction Draw Inspections consistently with local inspectors as competitively as Partner!


SBA 504 Loan Program for Energy Efficiency Projects

June 3, 2009

The Small Business Administration has a plan to help small business and encourage energy upgrades to buildings. If you do an energy audit and show an action plan to improve energy efficiency the SBA will double the size of the loan that they will guarantee. Normally, lenders benefits from up to a $2 million loan guaranty, now under the new SBA 504 Loan Program for Energy Efficiency Projects, SBA Lenders will benefit from as much as a $4 million loan guaranty. SBA Loans are far better than conventional loans as they allow for up to 90% leverage have low rates.

To qualify for the additional loan amount the borrower will need to show a detailed plan on how they will increase their energy efficiency by 10% or install a renewable energy source. To accomplish the former, the borrower will need an energy audit of their current building and a plan projecting future energy usage. The energy audit and the action plan are provided by energy engineering firms such as Partner Energy.

Of course, he borrower must implement the plan, but 10% energy efficiency improvement is easily achievable. The Energy Audit will likely reveal several relatively inexpensive ways to improve energy usage and the borrower’s investments will likely have payback periods of less than 5 years.

For SBA loans over $5 million, the SBA 504 Loan Program for Energy Efficiency is a great deal. The borrower gets a great loan in terms of leverage and rate and is required to make a inexpensive investments in their building in return.

Energy Benchmarking

May 5, 2009

In California Assembly Bill 1103 (AB 1103) requires that commercial buildings are benchmarked for energy efficiency in 2009 and that their Energy Star rating is disclosed to buyers, lenders and lessees during any real estate transaction that occurs after January 1, 2010. 

Commercial building owners would be wise to begin benchmarking their portfolio now in 2009.   Energy Auditing companies such as Partner Energy can provide low cost benchmarking services that meet the legal requirement and identify low hanging fruit for energy savings.  

Buyers of buildings in 2009 are requesting that an basic energy audit be included as an add on to their Property Condition Assessment.

SBA Environmental Requirements

January 25, 2009

At the January 2009 Environmental Bankers Association convention in Charlotte, I was one of the panelists on the new SBA Standard for Phase I Environmental Site Assessments.   During the presentation I stated that I interviewed many members of the SBAs environmental staff and that they were committed to helping bankers with questions.  I pledged to publish the contact information of the SBA Staffers and I suppose this blog is as good as place as any.  


For appeals, the SBA encourages lenders to email their standard email:


Here is the contact for the top environmental legal person and the top environmental technical person at the SBA:


Eric Adam

SBA District Council

Mr. Adams Chairs the Environmental Committee



Steve Reynolds

SBAs Staff Environmental Professional



I understand that the new version of SBA SOP 50-10 will be published within the next month.  More changes to Phase I ESA are always fun.


With respect to issues with the environmental requirements for SBA Foreclosures, refer to the SBA Standard 50-51.  Note that the standard will be changing to something closer to SOP 50-10 in 2009.  Feel free to contact me at 310-615-4500.

Records Search and Risk Assessment

January 10, 2009

Records Search and Risk Assessment is a limited environmental due diligence product that was created by the Federal Small Business Administration as a tool to inexpensively evaluate real estate as potential collateral for an SBA Loan.  The SBA published SOP 50-10 and specified a phased base approach to environmental due diligence.  The Records Review and Risk Assessment (RSRA) figures prominently in the SBA prescribed due diligences requirements.  The RSRA is less expensive than a Phase I Environmental Site Assessment and intended for low risk properties. 

The RSRA requires an environmental database and a few historical sources.  This product does not require a site visit by an environmental professional.  

A detailed description of the new (2007) SOP 50-10 Standards and how the Records Search and Risk Assessment fits into the new standard is provided in an Article by Joe Derhake with Partner Engineering and Science published in the Scotsmen Guide titled, “New Due Diligence Needed for SBA Loans.

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