MADISON, Wis. — Only a third of all credit unions offer commercial loans, but they can provide a profitable business line for many small institutions, according to a white paper released by the CUNA Lending Council.
In the report, titled "Finding Success in the Commercial Lending Space," the council offered a range of advice for credit unions interested in starting a commercial lending program.
Provisions of the Credit Union Membership Access Act (HR 1151) prohibit most credit unions from lending more than 12.25% of their total assets — a cap that limits the ability of credit unions to offer business loans.
Given these limitations, the CUNA Lending Council advised CUs interested in developing a member business lending program to reach out to credit unions that have experience with commercial lending. Credit unions should also hire employees who have experience managing business loans, and make long-term investments in staff training systems.
Additionally, the white paper suggests that credit unions can find success by focusing on a niche market, such as agriculture or multi-family properties.
The CUNA Lending Council's white paper can be accessed on organization's website:
