I know CRA and logic does not go hand-in-hand, but I need your help! If during the term of a business loan the maturity date is extended a month or two, is this considered a renewal? The CRA Q&A Section .42(a) Q5 states that "a renewal refers to an extension of the term of a loan". While technically it is an extension, it seems silly to report it for a one or two month time. What is your opinion, and if it is explained anywhere, where? Thanks for your help!

The CRA was amended effective this year. You no longer have to discern whether or not a transaction is a renewal or an extension. Instead, you need to remember that an extension of credit can only be reported once in a calendar year. For instance:

If you renew a January loan in March and do not add new money, you cannot report it again.

But if you renew the January loan in March and add $5,000 to it, the $5,000 is reportable.

If you renew a December 2001 loan in January 2002, the entire amount is reportable because it has not yet been reported in the year 2002.

This is much easier than having to decide if a transaction is a renewal or extension.....if it should be reported or not reported.

Okay, I follow your thoughts. How about if a loan was originated and reported last year, and this year it has a one month extension, must it be reported even if it was a "holiday" extension similar to what is done on consumer loans? The term has changed but only for a month. Does it still get reported? picky-picky, I know. Thanks!

A renewal means the satisfaction and replacement of the old obligation which, to me, means the signing of a new promissory note. Mere extensions of a payment or two, or even of the entire debt for month or two, without the benefit of a new note, has never been a reportable event.

Picky, picky?? Where CRA reporting is concerned, there is no such thing.