We recently originated a revolving line of credit to a local new and used car dealership to finance its inventory. They appear to meet the SBA standards of a small business and also when I look up the pay of typical car dealership jobs, they mostly appear to be under 80% of AMI. I'm thinking this could be a CDL under the economic development hook as the RLOC allows the dealership to finance their inventory and thus retaining jobs. Agree?

I understand your intention, but any loan to a business could be construed as allowing a business to retain jobs. So it's not likely examiners would accept your argument unless you had some convincing evidence that the dealership was about to close down if you didn't provide the loan. Even then, if the LOC was for <=$1MM it would be a small business loan. Also, if the dealership's existence was so tenuous I would worry about safety and soundness issues.

Thanks, Len.

Can you give some examples of what would qualify as an economic development loan? I was in a training session recently which mentioned the SBA small business standards and documenting that jobs were below 80% of area median income but I guess it was unclear what else came into play.

I find LMI job creation is more convincing than LMI job retention, but YMMV with examiners. We've received CD credit for loans to open retail/restaurant type businesses where a majority of the jobs being created will be LMI. As Len implied, we have had a hard time getting any credit for operating/flooring lines of credit when retaining LMI jobs is our only argument.

However, we used the retaining LMI jobs to get credit on a lot of our PPP loans, but like Len said, we were able to show that the jobs would have likely been lost without the loan.