working capital

In doing my CRA review, I am finding that many working capital loans are being used for improvements to rental property, down payment on personal residences,automobile for company even though they are a physician or dentist or eye doctor. Am I not right that these loans should be taken off the CRA LAR and coded as home improvements/purchase money/personal expenses, etc? Just saying

Down payment on a personal residence should NOT be on your call report as a business purpose loan. Automobile for the business is a business purpose loan and it is up to the company to determine how they are dealing with business vs personal use for tax purposes.

Improvements for rental property is very frequently business purpose. If a business purpose loan is more than 50% secured by residential real estate it cannot be a CRA Type 1 small business loan and should not be in that part of the call report.

You should not make changes without gaining a full understanding of how the bank is coding loans and preparing its call report.

Also become familiar with Reg Z rules for non-owner occupied rental real estate and make sure that the bank is following those rules.