FORT LAUDERDALE, Fla. – CU Business Capital, LLC, a CUSO owned by 25 credit unions, committed $45 million yesterday to funding SBA-backed small business loans, part of an ultimate goal of as much as $100 million.
The initial $45 million commitment was made by nine credit unions who see the growing need for capital by small business owners, according to Murray Halperin, spokesman for the business loan CUSO. "We’ve got another group coming in right now that plans to make an additional commitment. We’re shooting for a total of $100 million," Halperin told The Credit Union Journal yesterday.
The plan was prompted by both the growing need for small business credit and recent moves by the U.S. Small Business Administration to ease standards for participation in its 504 and 7 (a) programs, Halperin said. "Credit unions are stepping up to fill a credit void," he stated.
"Our ultimate goal is getting the word out to the business community," said Halperin.
While the initial commitment is coming from CUBC owners, other credit unions are invited to join in as long as they use the CUSO’s underwriting and servicing. The initial focus will be on the East Coast, with plans to expand into the rest of the country.
Originating credit unions will initially hold the loans but the bigger loans are expected to be participated out, once the market recovers.
CUBC has a team of SBA lenders and commercial real estate lenders in several states and has recently hired additional staff with SBA experience, said Halperin.
The nine credit unions participating in the first tranche of loans are: State Employees CU of Maryland, Nassau Educators FCU, Franklin Mint FCU, Bay gulf FCU, Freedom of Massachusetts FCU, McCoy FCU, Parda FCU, Premier FCU and STCU FCU.
