Successful Member Business Lending Strategies

As more credit unions add member business loans to their lending portfolio, they need to develop an effective strategy to create a strong and successful member business lending program. On Wednesday April 28th, 25 credit unions participated in a Callahan's webinar on this topic.

 
 

As more credit unions add member business loans to their lending portfolio, they need to develop an effective strategy to create a strong and successful member business lending program. On Wednesday April 28th, 25 credit unions participated in a Callahan's webinar on this topic.

Keith Reynolds, Business Services Manager of Citizen's Equity First Credit Union (CEFCU) spoke about the need to make sure that member business lending fits into your corporate culture. At CEFCU, each branch employee is trained to open business accounts and loan officers are developed within the organization. By doing this, all employees become familiar with member business lending and are comfortable dealing with these types of loans. Keith then discussed the process CEFCU goes through from origination to loan administration and how to market business services.

Doug Fecher, President of Wright-Patt Credit Union, talked about how his credit union works with a multi-owned CUSO called Cooperative Business Services to process member business loans. The CUSO was created by Wright-Patt and six other credit unions to provide them with the back-end support needed to process business loans. Wright-Patt then has a business lending officer at the credit union who handles marketing these loans to members.

Finally, Sherry Sterling, MBL Officer at Visions Credit Union, presented Visions' member business lending plan for the past four years and showed how they've beaten expectations each year. She also offered these tips for credit unions who are thinking about starting or have just begun a member business lending program:

  • Marketing- Community organizations (Chamber of Commerce), economic agencies and the Small Business Administration (SBA) are all great resources for finding potential businesses to offer your services to. Visions also found that seminars on topics of interest to small businesses were also very effective.
  • Staffing- The ideal employee of a business lending staff will have underwriting, SBA documentation and business development experience. The NCUA requirement of 2 years lending experience for a member business loan officer is very minimal, so you would ideally like to find someone with around 10 years experience and strong roots in your community.
  • Caveats- Structuring and servicing business loans are just as important as originating them. Business clients are also very demanding and may insist on going to the top for answers.

If you'd like to learn more about what these speakers discussed or are looking for more background information on member business lending, we encourage you to take a look at our webcast, Incorporating Member Business Lending into your Loan Portfolio. Click here for more information.

 

 

 

May 3, 2004


Comments

 
 
 
  • There are a lot of articles about starting business lending, but there does not appear to be much going further. Porducts, support, third party vendors for services and a multitude of other matters would be helpful to those who may be starting or who have a newer program.
    Anonymous
     
     
     
  • To "lite" on how to steps & BENEFITS to CU's SMALLER than these GIANTS of entering into member business lending. I really wish you'd included something about micro lending for self-employed people (PCs for medical transcriptionits, for example) as well as typical secured lending (truck for plumbers, home equity to add a commercial kitchen) that just happens tohave a "business" use for the member. In mu experience w/ CUs under $100 mil FAR TOO MANY SHY AWAY from the "b" word & don't give themselves credit for their pre-existing risk management skills for making & collecting small business loans - THUS denying their creditworthy members and DRIVING THEM TO THE BIG BAD BE WORD "BANK."
    Anonymous
     
     
     
  • To "lite" on how to steps & BENEFITS to CU's SMALLER than these GIANTS of entering into member business lending. I really wish you'd included something about micro lending for self-employed people (PCs for medical transcriptionits, for example) as well as typical secured lending (truck for plumbers, home equity to add a commercial kitchen) that just happens tohave a "business" use for the member. In mu experience w/ CUs under $100 mil FAR TOO MANY SHY AWAY from the "b" word & don't give themselves credit for their pre-existing risk management skills for making & collecting small business loans - THUS denying their creditworthy members and DRIVING THEM TO THE BIG BAD BE WORD "BANK."
    Anonymous
     
     
     
  • To "lite" on how to steps & BENEFITS to CU's SMALLER than these GIANTS of entering into member business lending. I really wish you'd included something about micro lending for self-employed people (PCs for medical transcriptionits, for example) as well as typical secured lending (truck for plumbers, home equity to add a commercial kitchen) that just happens tohave a "business" use for the member. In mu experience w/ CUs under $100 mil FAR TOO MANY SHY AWAY from the "b" word & don't give themselves credit for their pre-existing risk management skills for making & collecting small business loans - THUS denying their creditworthy members and DRIVING THEM TO THE BIG BAD BE WORD "BANK."
    Anonymous