Yes! Seventy percent of credit unions with over $50 million in assets have at least one commercial loan on the books. (This does not include business purpose loans under $50,000 or residential rental properties that do not meet the regulatory definition of a business loan).

In fact, in 2017, the NCUA provided regulatory relief to small credit unions looking to assist members with business-related needs.

No problem! NCUA Regulations permit the use of a CUSO that is independent of the loan transaction to assist credit unions with business lending. As with other vendors, the credit union must conduct due diligence and thoroughly understand the risks associated with business lending relative to the size and complexity of its loan portfolio.

MBFS CUSO currently serves as a trusted, independent partner for more than 100 credit unions nationwide, and we would be pleased to show you how we can serve your credit union as well.

Some are, and some are not. While 5+ unit multi-family properties are classified as commercial (member business) loans, 1–4-unit family residential properties no longer are. Nevertheless, credit unions must still properly underwrite, close, and manage the risk associated with this (1–4 unit) category of loan because residential investment property loans have many of the same risk characteristics as business loans and should be managed differently than residential mortgages.

MBFS can help manage these risks by skillfully and professionally underwriting, closing, and managing the servicing of these investment properties for your credit union.

The simple answer is twofold: resources and experience. While loans guaranteed by the Small Business Administration are an excellent way to complement your business lending program and provide financing to the local community, they can be a very challenging undertaking if the credit union does not have the extensive in-house resources necessary as well as experience in underwriting, closing, and servicing these types of loans. Because the SBA loan process differs from traditional business loans, it is highly advisable for credit unions without prior SBA experience to utilize a third-party SBA specialist, such as a CUSO, to make the process both less risky for the credit union and less cumbersome for the borrower. One potential risk associated with an improperly managed loan is the possibility of a reduction or loss of the government loan guarantee.

MBFS has both the resources and the experience necessary to successfully navigate the challenges of underwriting, closing, and servicing these types of loans. With our professional team of SBA loan specialists, we stand ready to help our credit union partners address the intricacies of the various SBA lending programs.

Yes! Purchasing a portion of another credit union’s business loans is an excellent way to diversify risk, build income, and assist other credit unions. But to be successful in this endeavor, credit unions purchasing loans must exercise the same level of diligence in originating and closing the loan as if they were lending to one of their own members. Participation loans have similar credit criteria as other loans and should be viewed as a “loan” with credit risk and not as an investment.

MBFS can assist your credit union in originating and closing loan participation interests both regionally and nationwide, as well as help with other aspects of the loan participation process such as risk management.