June 22, 2009


  • In the current environment earnings are taking a beating. It's hard to earn income when competing against subsidized captive auto company lenders offering 0% financing and discounted pricing or providing and retaining real estate loans in the current low interest market. Home equity lines of credit are equally difficult because the market may not have bottomed yet and they become essentially signatue loans. Investments that yield less rthan 1% won't pay the bills either.

    However, there is a viable alternative and that is using the current government guaranttes on SBA loans. Guarantees are now up to 90%; the loans are variable and there is fee income. Small business employs over 60% of those working. During a recession the number of small businesses usually grows. Small business employees provide membership growth and share and loan opportunities in addition to HSA's and 401k's. The current economic downturn provides credit unions an opportunity to diversify and expand services. Gordon
    Gordon Dames