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#2282127 - 03/10/23 07:57 PM Restaurant - CD Loan?
banker-12 Offline
Diamond Poster
Joined: May 2007
Posts: 1,240
We have a loan over $1million to refinance a restaurant. It is located in a middle income census tract. Can we include it as a CD loan as economic development to promote job retention/creation even if it's not located in an LMI tract. The average wage in the industry are LMI.

Thank You

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#2282128 - 03/10/23 08:16 PM Re: Restaurant - CD Loan? banker-12
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
If you could, why not classify every loan to a restaurant, hotel or other service industry that pays minimum wage?
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#2282129 - 03/10/23 08:35 PM Re: Restaurant - CD Loan? banker-12
banker-12 Offline
Diamond Poster
Joined: May 2007
Posts: 1,240
We have been including those in an LMI tract. . Was just wondering for the ones in a middle income tract since it does benefit LMI individuals.

Thank You

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#2282195 - 03/13/23 08:53 PM Re: Restaurant - CD Loan? banker-12
Len S Offline
Diamond Poster
Joined: Oct 2004
Posts: 2,084
Connecticut
Economic Development under CRA does not depend on tract income class. It involves job creation, preservation or improvement by a business that qualifies according to the "size test" which means <=$1 million GAR or the small business size standards for the SBA. So if your loan is not a small business loan (which a loan >$1 million would indicate) and it is to a business that meets the size test and the jobs test you could get CD credit under Economic Development. If the business is in LMI tracts you may possibly get credit under revitalization/stabilization too. It would be helpful if you could get a local government official to confirm the restaurant is consistent with the economic development plans of the municipality.
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