BY CORINNE KALSKY
The current economic climate is ripe with growth opportunities for credit unions, but with that opportunity comes greater risk as well. In this respect, not all growth paths are equal. These five strategies will help your CU expand its business services program without leaving behind a risky sour taste.
With the economy continuing its long, slow recovery from the financial crisis, many credit unions now seek growth in their member business lending programs. Like a double-scoop ice cream cone, the future of credit union business lending looks tasty indeed. Small businesses in the United States continue to be underserved by the big banks, and recent regulatory changes will allow credit unions to compete more effectively for these lucrative relationships.
But with expansion comes new and heightened risks. Credit union executives should approach growth in this market with their eyes wide open before taking their licks.
Growth Comes in Several Flavors
Today, credit unions can approach growth in business lending in several ways. One strategy is to broaden the market by targeting areas already served by the credit union as a whole, entering completely new geographic markets where the credit union has no existing branch presence or seeking new industry segments within the institution’s existing branch footprint. Regardless, targeting a new market takes planning. A good way to start is to commission a third-party market survey to better understand the current competitive landscape within your target market.
