Does an SBA loan for a crematorium need a Phase I?
Yes, where real estate used as a crematory is offered as security for a 7(a) or 504 loan and is not a unit in a Multi-Unit Building (non-industrial, four or more units). Appendix 6 of SOP 50 10 8.1, "NAICS Codes of Environmentally Sensitive Industries", lists death care with one printed condition:
8122 DEATH CARE SERVICES (unless no embalming or cremation at the Property)
SBA's size standards table (13 CFR 121.201) prints "812220 Cemeteries and Crematories", and Appendix 6 says "A 4 digit NAICS code includes all industries beginning with those 4 digits", so crematories fall inside 8122. The bracket excepts a Property with no embalming and no cremation: a crematory with its retort on site is not one, and an arrangement office with neither is a question for your lender.
The rule follows the collateral and its history, not the size of the loan. SBA requires an Environmental Investigation of "all commercial Property upon which a security interest such as a mortgage, deed of trust, or leasehold deed of trust is offered as security for a loan or debenture", the lender compares the NAICS codes for "the Property’s current and known prior uses" with Appendix 6, and on a match the investigation "must begin with a Phase I, regardless of the amount of the loan".
For a crematory that puts the building's past in play as well as your own retort: a former funeral home with an embalming room, or premises where cremation was carried out before you, are compared on that known prior use, and a lease does not change that where the lender takes a leasehold deed of trust. The lender determines the codes, so on a new build with no death care history ask how the Property will be coded, and keep a Phase I in the budget and the dated timeline until you know; our SBA environmental requirements guide covers each step.
Frequently asked questions
How much does it cost to start a crematorium?
A standalone crematory typically costs $300,000 to $500,000 all-in. The retort itself is $150,000 to $200,000 new; the rest is installation, the building, permitting, utilities and working capital.
Do you need a license to operate a crematory?
Yes. Almost every state requires an air-quality permit before installation and a state crematory license, usually via the funeral or cemetery board, plus appropriate zoning and operator certification.
Is a crematorium a profitable business?
It can be, with volume. Direct cremations sell for roughly $1,500 to $3,000 and trade cremations for $200 to $400, against low variable cost, but profitability depends on filling retort capacity.
How long does it take to open a crematorium?
Usually 9 to 18 months, with most of the time spent on zoning, the air-quality permit and the build, not the cremation equipment itself.
Can you run a crematory without a funeral home?
Yes. Many standalone trade crematories operate purely wholesale, performing cremations for multiple funeral homes that do not own a retort.
Reviewed by Muhammad Tayyab Shabbir, Founder of AVVALE. Our team has prepared funding documents for 500+ businesses across regulated, capital-intensive and main-street industries, from SBA and bank loans to investor and visa applications.
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Sources: NFDA 2025 Cremation & Burial Report (US cremation rate 63.4%, projected 82.3% by 2045); cremation-equipment manufacturer pricing (retort $150k to $200k; all-in $300k to $500k); state environmental and funeral/cemetery board permitting requirements (CA, PA, FL, NY). Figures are industry ranges for planning; confirm current costs and your state rules before filing. SBA rules: SOP 50 10 8.1, effective 1 October 2026 (Section A, Chapter 5; Section B, Chapters 1 and 2; Section C, Chapter 1; Appendices 3, 4, 6 and 15), and 13 CFR 121.201, checked against the raw text on 11 October 2026. This is general information, not lending, legal or environmental advice; we are not a lender, a CDC or an Environmental Professional, so confirm with yours.