It isn't easy to get money to buy or refinance commercial real estate. Not only do lenders worry about declining values and the ability of borrowers to cover payments, they also worry that down the road, property owners may be nailed with the cost of cleaning up previously undetected environmental contamination, as mandated by federal and state statutes -- perhaps triggering default on loans.

You may or may not be able to influence the lender's assessment of the credit risks. But you can put to rest the banker's uneasiness about the on-site environmental risks. How? By buying insurance that protects your business from the potentially gigantic liability associated with a government order to remove hazardous waste from your property.

A few insurance companies, including Denver-based ERIC Group, have begun offering this type of coverage to real estate owners. Before granting coverage, insurers typically require a preliminary (or "phase one") environmental audit of the property from one of their approved consultants. Once that audit is completed (usually at a cost of around $3,000) and no big problems are unearthed, they agree to write a policy.

The coverage isn't cheap; $2 million worth of cleanup insurance from ERIC, for example, runs from $3,000 to $4,000 annually. But it may be one of the only steps you can take to get your lender to focus on the merits of your deal. It could also help you when it comes time to sell the business.

Besides ERIC (303-388-9221), two other insurance companies offering this type of coverage are Environmental Compliance Services, in Exton, Pa. (800-327-1414); and American International Group, in New York City (212-770-7000).

-- Bruce G. Posner