I've searched and found similar topics, but nothing specific enough that I felt comfortable depending on it - so here goes:

Loan is to purchase a business and all assets thereof, including the building. Collateral consists of the commercial building that the business resides in, adjacent commercial acreage that the business happens to hold, and 5 residential development lots that the buyer decided to throw in to get the LTV down. ARGH! So now what do I do? This is coded on our Call Report as a 1e (highest value is held by the building, obviously), but what about the vacant acreage and residential lots????

If the question is does this qualify as a small business loan, then IMO it is, as long as its 1 mil or less.

The decision to classify a loan as small business is based on the purpose of the loan and not the collateral.

If I read the post incorrectly and did not answer your question please let me know.

I'm sorry - I didn't state my question very clearly at all, did I?

When deciding which portion of the Call Report a loan should be reported under (and therfore how to report it for CRA), what bearing does mixed collateral have on the coding?

Does the commercial building default this loan to 1e and type 1 reporting regardless of the additional land and development lots? Or do these properties (which by themselves would both be 1a's and non-reportable) change the reporting requirements of this loan in any way?

I'd lean on that building valuation for the call report Becca. You consider borrower, purpose and collateral for call report codes. In this case, your borrower is purchasing the building (business) which they're taking as collateral. The other property is not as important in the factor.

Just an fyi...if the other property included residential structures, I'd say you'd still report it as I suggest above, but that you report it as a type 3 for CRA purposes.

Thanks Dawnie - I knew I could count on the Queen!