BATON ROUGE, La.-Market demand has led Neighbors Credit Union to underwrite its first two commercial loans.
Its new business lending program is still in the development stages, and hasn't been strongly marketed yet, said Eddie Vollenweider, business services manager for the $360-million CU. "We're only doing word-of-mouth right now," he said. "Initially, we were reacting to the requests of our members. They were business owners and wanted to do all of their business at Neighbors."
"The timing was just the evolution of our credit union, and the way business has been," he continued. "It wasn't a knee-jerk reaction to economy. It was really just the growing of the branches."
Throughout the next year, the 50,000-member CU plans to strongly market its new business lending service to its current membership and to potential new members.
For other credit unions considering entering into business lending, Vollenweider advises not rushing. "I would take my time with it," he said. "We are really going into it at our own pace. There are a lot of intricacies. We priced it a point so we can sustain business, not just to get people in. I've seen others price low, and when business goes up it turns into an expense. We're trying to make sure we underwrite intelligently."
And he cautioned, "You definitely have concerns about the economy-how bad the recession is going to hit," he said.
Neighbors FCU is using Portland, Ore.-based CU Business Group, a CUSO, to help in the underwriting of the loans.
