We have a SBA 504 loan in which the proceeds were used to purchase a commercial building and do some renovations to it. It has a Call Report Code of 1e1 so we are currently including it in our CRA LR. Because part of the loan proceeds will be used for the construction, our auditor is questioning whether this is correct and should it be under Call Report Code !a.

Our CRA director wants to keep it on the CRA LR because the majority of the proceeds were used to purchase the loan and not the renovations.

Has anyone come across this same scenario and have an opinion? Thank you in advance for your help!