Find Your New Lending Forte

This week, CreditUnions.com is all about developing the perfect niche offering for those hard-to-serve members.

In a 2013 survey conducted by the Federal Reserve Bank of New York, 37% of small businesses across a four-state region listed credit availability as one of their top challenges. Fewer than half of the businesses surveyed that applied for a loan last year gained approval, and one in four respondents that did not apply for a loan chose not to do so because they did not think they’d qualify.

This is disheartening news for small businesses, but it’s a source of inspiration for credit unions. At least, that’s what Lower East Side People’s Federal Credit Union thinks. That’s why approximately 10% of the New York City-based credit union’s loan portfolio is dedicated to loans and lines of credit for fledgling entrepreneurs and startups that are less than two years old.

Our small business loans typically average around $48,000, with a minimum limit of $500 and a ceiling of $250,000,& says Angel Garcia, the credit union’s business development specialist.

Read more about the credit union’s best practices in small business lending this week on CreditUnions.com.

Elsewhere on the site, we’re talking all about niche lending. Every credit union has hard-to-serve members, so check out the interesting options your peers are making available across the United States.

With a little creativity, Legacy Community Federal Credit Union revamped its signature loan to shore up its loan portfolio. According to Glenn Bryan, senior vice president at Legacy, the problem with signature loans is they don’t capture members’ imaginations. So when the economy staggered, household income stagnated, and spending stalled, the credit union deployed a rebranding effort that bundled its signature loans into one easily identifiable product, the Legacy Lifestyle Loan. Learn more today.

When members take out a home equity line of credit at Hanscom Federal Credit Union, they have three options for drawing on that account: a traditional check, a credit card attached to the line of credit, or a payment system that allows members to lock in a fixed, low rate for a portion of the HELOC. This week, Hanscom’s senior vice president of lending, Tom Becker, breaks down Hanscom’s HELOC program and talks about why it works for the credit union and its membership.

Members 1st Federal Credit Union posts consistently strong loan growth. The credit union’s enviable performance is partly the result of a diversified portfolio that reflects its philosophy to offer great rates and consistent service while developing solutions that fit the needs of today’s members. This outlook has allowed the $2.6 billion institution to build a solid mix of products and has endeared it to more than 250,000 members and hundreds of local businesses. In an update from Credit Union Strategy & Performance, we look at how the Pennsylvania-based credit union uses merchant and business lending to reach new members.

It’s too risky … It caused the recession … It’s irresponsible.

The concerns surrounding construction and development lending abound good thing Community First Credit Union in Appleton, WI, isn’t afraid to take on a challenge.

If you’re going to do business lending, the last part of it you should jump into is construction and development,& says Kim Van Osdol, senior vice president of business services. It’s a risky thing to do if you’re not working with strong businesses in the right scenarios.&

So how does the credit union make sure its portfolio is as structurally sound as possible? Read this week’s profile and find out.

Finally, for a snapshot of niche lending at credit unions today, check out our graphic of the week: 4 Graphs On The State Of Credit Union Lending. Where do you fit in?

May 19, 2014

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