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#1482797 - 12/20/10 03:07 PM every SBA with revs <$1million....
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
Please settle a disagreement. Can every SBA, for businesses with revenue less than $1 million, be counted for consideration? Would any NOT be counted? Assume they are all in our designated area.

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CRA
#1483019 - 12/20/10 08:32 PM Re: every SBA with revs <$1million.... Trees
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 2,137
Connecticut
Your question is not clear. Do you mean consideration as a small business loan or as a community development loan?
Revenue size is not a determinant for small business loans. It can be a factor if you are looking for CD credit. But the fact that the business borrower qualified for SBA financing indicates it meets Part 121 regarding business size which would be relevant for CD credit. The problem you may run into is that if the loan is a small business loan (determined by loan size, not business size) you cannot get credit as a CD loan unless you are an ISB and exercise your elective to recognize qualified small business loans as community development loans during a CRA PE.
SBA guaranteed loans can exceed $1 million and therefore may not be considered as small business loans (Call Report definition), but they could still be considered to be CD loans if they possess the requisite qualifications.
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#1485242 - 12/24/10 02:21 PM Re: every SBA with revs <$1million.... Len S
Trees Offline
Power Poster
Joined: Apr 2005
Posts: 4,013
Wow. I need more coffee to understand all this. We are an ISB. have been for last couple exams. I'm trying to develop and give some rules of thumb to the Comm Lenders. We are a big SBA lender for our area. We thought that, as a rule, if we provide financing to businesses with revs less than $1 million, these loans can all be included for CRA consideration.

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#1485264 - 12/24/10 02:46 PM Re: every SBA with revs <$1million.... Trees
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
If the loans are of $1 million or less (loan size not revenue) and fit the definition of small business loan for CRA, they are reported as small business loans for CRA unless you use the community development option available to ISBs. As an ISB you have the added option of selecting small business loans that would otherwise meet community development requirements and reporting them as community development. Only ISBs have this option.

The CRA FAQs provide an explanation of this ISB option.

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