A business loan for working capital purposes with a loan amount of $750,000 is primarily secured by equipment but the owner's principal residence is taken as abundance of caution.

Can we report this as a CRA small business loan?

Some take the stance that if there is a lien on the property, it is secured by the property and should not be reported.

That is the stance I have taken, just want to be re-assured I suppose. Thanks.

The call report instructions were revised in 2009 to provide more freedom in these situations. It used to be other than abundance of caution was excluded from small business reporting. It now is primarily secured. It is covered in the examples in the call report instructions. Check page 74 of the Glossary for the definition of Loans Secured by Real Estate and accompanying examples.

"Loan Secured by Real Estate: For purposes of these reports, a loan secured by real estate is a loan secured wholly or substantially by a lien or liens on real property for which the lien or liens are central to the extension of the credit – that is, the borrower would not have been extended credit in the same amount or on terms as favorable without the lien or liens on real property. To be considered wholly or substantially secured by a lien or liens on real property, the estimated value of the real estate collateral (after deducting any more senior liens held by others) must be greater than 50 percent of the principal amount of the loan at origination."

Thank you, so you are saying that we can report it as a small business loan because the call report code is not based on real estate?

See my revised answer above with more detail. Take a look at the call report definition of Loans Secured by Real Estate, it was "loosened" and makes more loans eligible for CRA Type 1. Page 74 of the Call Report glossary.

This is what I needed, thanks for your clarification.

Watch out that it isn't also reportable under HMDA which is possible if it is a refi situation. In that case you would double report the loan. This is far more likely to happen with the new Call Report instructions.