In this article, we will be discussing ineligible project costs in the Financing menu for 504 and 7a projects. All Cost Types for Commercial loans are considered eligible for financing.

The Project Cost screen allows the user to add all project costs involved in the project. For more information about creating and customizing Cost Types, please review our KB article: Customizing Project Costs. Project Costs are categorized as eligible for SBA financing or ineligible for SBA financing. Both will count towards the Project Total but only the Total Eligible Costs will be available in the Financing tab.

Q: My ineligible project cost is from the same Third Party Lender and I would like to have it shown as part of the TPL's debt service.

In some cases, the Third Party Lender is financing some of the total project costs that is not eligible for SBA financing. However, the user would like to have this amount shown as part of the TPL's portion of the debt service in the Financial Statements area. This can be done in the Financing sources area for the TPL.

1. Select the TPL record in the Financing > Financing area.
2. Select the Ineligible Costs tab. Enter in the amount of ineligible costs.
   
3. Return to the Loan tab and verify the new Gross amount and the Monthly Payment calculation. This value will be used for the Financial Statement calculation when showing the debt from the TPL.
   
4. IMPORTANT NOTE: The estimated Monthly Payment calculation flows into the debt service coverage section of the Income Statement for the Primary OC. This also affects the Ventures calculation of the long term debt (CPLTD-Bank/Other) and notes payable (Notes Payable-Bank/Other) on the Balance Sheet which would be used in the calculation of the Proforma. Users should keep this in mind when trying to balance the Proforma.