I have a loan that is to a private non-profit public benefit corporation that provides community based programs and education. The purpose of the loan is for "working capital between the time government agrencies are billed for services provided under various contracts/grants". The loan is classified as unsecured but for additional support we are taking a security agreement and UCC on A/R and deposit accounts. Would this loan be classified small business Type 1 or can we report is as a community development loan?

Loans to non-profits do not qualify as small business loans when unsecured.

I'll change that just a tad...Loans to non-profits, unsecured and secured with non-realestate collateral, do not qualify as small business loans, so you could count it as a CD loan if it otherwise qualifies.

If my lender brought me a loan and called it "unsecured" but secured it with a security agreement and UCC on A/R's and deposit accounts I'd send it back and explain to the lender what "unsecured" means. Unsecured means...no security! For additional support or otherwise! When you used that last term (for additional support) you said "we want security".

Just a "tad" more elaboration to make certain there is no misunderstanding. Dawnie and KC are correct, but if the loan is secured by nonfarm nonresidential re it would be reportable (which Dawnie and KC implied but don't state explicitly).