GAR for Individuals

When I was at a Big bank we had a GAR calculation method for Individuals commercial borrowers but I cannot remember it. Does anyone know the correct way to calculate GAR for CRA data on individuals?

Do you mean dba entities?

Yes or just individual commercial borrowers

For dba entities you could use Schedule C of the individual's tax return. That shows the GAR for the business

If I may ask another question, what if you have a business loan to an individual that does not have a schedule C or Schedule F?

For example, they are involved in one or more businesses or real estate projects/holdings and have a revolving commercial line of credit for business investments/expenses. They usually have a Schedule E with income in Part I and/or Part II.

Another example is someone doing individual renovate to sell projects. They do not have any income until they sell the property. The income/expenses are not evidenced on their personal tax return when we underwrite the loan, but the repayment source is the sale of the property.

For CRA purposes, do you just call it "not known" or can you use "zero" or formula to get CRA credit for the loan?

If you have a financial statement of any type, tax returns, P&L (doesn't have to be certified), etc., that you relied upon when making the credit decision that will suffice. If you didn't rely on the P&L then "NA" is appropriate. There is no such thing as "zero" for the GAR - it is coded 1-4.

Sorry, I meant in the cases when there is no income like a start up or a real estate holding company, to use $0.00 for the gross annual revenue (since there was no income) and report it as "GAR Less that a million" rather than NA. In these cases, it is known but is just $0.00.

For startups with no annual revenue history, you would enter code "1" because you know it is zero