Here's a CRA puzzle for Dawnie....or whoever else wants to tackle it. I'm not sure what to do with it. Here goes....

John Doe is a rancher, but John Doe also owns a mill (John Doe Mills, Inc.).

John Doe obtained a loan from bank to purchase milo which he intended to sell to John Doe Mills Inc. The milo (and proceeds of its sale) was collateral, but it was not stored in a bonded warehouse, so it could not be used as the main collateral. The main collateral was John Doe's livestock. None of the milo was used for the ranching operation.

Is this a small business loan or a small farm loan?

John Doe the individual took out the loan for a business purpose which was to purchase raw goods to sell to a company. IMO its a Small Business Loan.

If John Doe the Rancher took the loan and the farm was the beneficary of the loan proceeds as well as profits of the sale to John Doe Mills. Then IMO it would be a Small Farm loan.

The reality is that an examiner, having access to the same information you have, would have no better clue as to whether this is a small farm or small business loan. Both count for the CRA lending test. So, even if they had a difference of opinion, it is a distinction without a difference. That being said, I would classify the loan as small farm since the intent was to purchase the milo. But, shoot, with that opinion and three bucks you could get some starbuck's coffee.

Here's the tiebreaker - where does this loan appear on your call report? I think it's clear you can make an argument for either, just make sure the CRA report lines up with the call report.