GRP Capital Closes Light Industrial Loan

October 26, 2021

GRP Capital closed a light industrial loan for our client recently. Our clients were star tenants in the building they were renting. As a result, they were ready to purchase their headquarters. GRP Capital worked in tandem with the clients and facilitated a closing for this light industrial facility.

GRP Capital Managing Director Krishan Patel upon closing this loan stated, “I was pleased to close this loan for our clients. They are very strong entrepreneurs and wanted the stability of owning their light industrial headquarters. We were even able to close the loan in time to obtain the benefits of the SBA stimulus package. As a result, our clients will have stable and affordable payments. We love focusing on the financing, so our clients can focus on running their business.” 

Like every commercial loan, this loan required an Environmental Site Assessment (ESA) and even a Phase II evaluation. Krishan Patel worked closely with our clients, along with our processing team. We scheduled the various site visits and obtained the needed documents. Thus, the ESA engineers could efficiently prepare their  reports for the lender’s approval. It is not unusual for light industrial sites to require more than just an ESA Phase I. It was important to make sure we communicated clearly with the clients, the lender and the ESA engineers.   

Things to Know about an Environmental Site Assessment: 

• ESA Phase I: Every full-time lender requires a Phase I for commercial loans, regardless of industry. This involves a visit to your business from an ESA engineer. The engineer will ask questions about the use of your building, its various plumbing and energy sources as well as waste management.

• ESA Inspection:  The ESA engineer will inspect major infrastructures of your location and will also take a quick look around at the public part of your business. These would include a dining room, factory floor, break rooms, sales offices, lobby, hotel guest rooms, etc.

•  But I never had an ESA before!: Sometimes, borrowers have received non-traditional financing like family loans, community loans and seller notes. These lenders may not have required ESA evaluations. This is common, but it is not the best business practice. Client borrowers should know what, if any, environmental conditions exist on their property.

• Light industrial and heavy manufacturing environmental concerns: Even hotels and restaurants require ESA evaluation and there are sometimes issues that need resolution. But the ESA is a critical component of the loan approval process for the manufacturing sector. This is because the manufacturing process can often contribute to environmental concerns.

•  After the ESA Phase I: After a Phase I, the engineer will either state that there are no environmental concerns or that there are. If there are concerns, the engineer will recommend a Phase II.

•  ESA Phase II: This will require another visit and typically more extensive studying, like collecting soil samples. After the Phase II work is completed, the engineer will issue the Phase II report. This report will also either state that there are concerns or give a list of recommendations. If there are recommendations, the lender and the client will seek assistance on figuring out how to remove any areas of concern.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research  the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.

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