MEMBER BUSINESS LENDING: Seize the Opportunity: Why It’s Time for Your Credit Union to Offer Member Business Lending



There’s no better time for credit unions to capitalize on the momentum that is taking place in the industry. And member business lending offers them an unparalleled opportunity to not only drive growth but also enhance member satisfaction. Find out how two credit unions seized their share of the pie.

Traditionally focused on share accounts and consumer-related loan services, credit unions are known today more for their expertise around products such as auto and student loans. The financial crisis of 2008 was a trying time for businesses across the United States, but it also presented an opportunity for credit unions to realize they can do even more for their members. While banks tightened their credit requirements and worried about profit margins, credit unions continued to do what they do best – take a careful and conservative approach to lending and focus on serving the needs of their members.
As a result of this commitment to delivering value and service, today credit unions across the country are building assets and growing memberships. According to the Credit Union National Association (CUNA), credit unions saw annualized asset growth of 4.8 percent in 2014, compared with 3.9 percent growth for the year prior. This growth was driven by a solid increase in deposits (5.7 percent in 2014 vs. 3.9 percent in 2013), along with an impressive 10.5 percent uptick in loan balances (over 7.3 percent in 2013). Total credit union membership increased across the nation as well, from 2.5 percent in 2013 to 3.1 percent in 2014.

In light of these positive trends, along with an improving economy and national employment rate, many credit unions are looking to capitalize on this momentum to further grow and expand their offerings. Specifically, an increasing number of credit unions are recognizing the substantial opportunity that member business lending (MBL) provides to drive growth as well as member satisfaction. According to the U.S. Small Business Administration, member business loans at federally insured credit unions more than quadrupled from $11.3 billion to $47.5 billion over the past 10 years. At the same time, the percentage of total credit unions that had member business loans on their balance sheets nearly doubled from 18 percent in 2004 to 34 percent in 2014.

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