CUSO’s building your credit union business portfolio

After years in the red, the American economy (although sluggishly and slowly) is starting to show signs of recovery after The Great Recession. And while individual job reports, market indicators and trend tracking is certainly important, the lead driver in all recovery efforts is the American small business market.

As a vital provider of small business loans, credit unions are a full-scale partner in this economic recovery. Credit unions that partner with credit union service organizations (CUSOs) stand an even better chance of both providing invaluable economic assistance to small business recovery and realizing respectable profit margins in return.

CUSOs are of tremendous benefit to credit unions looking at developing their own in-house member business lending programs. And with increased and expanding activity in business lending, using a third-party service provider is an economical and smart way for a credit union to both grow its business portfolio and build a positive reputation amongst its business members and the larger community it serves.

There are several ways CUSOs can help credit unions in building their business loan portfolios. These include:

Hiring Qualified Business Lending Experts
One of the steepest challenges credit unions face in developing an in-house member business lending program is in acquiring the expertise (in the form of personnel) to help lead it. This expertise cannot usually be easily acquired by individual credit unions and typically takes 2 to 3 years to build. How can a credit union cover this 2 to 3 year period of expense (in heavy salary burden form) while its member business lending program is struggling to get on its feet? By joining a CUSO.

CUSOs offer this expertise in the form of experienced and dedicated professionals that already have years invested in member business lending. And since member business lending is much more targeted and specific than general consumer lending, such expertise is critical to the success of any such program.

Reducing Fixed Costs
By joining a CUSO, credit unions also realize a reduction in fixed costs. And to sweeten the deal, access to the expertise of CUSO member business lending professionals also gives credit unions key insights into industry best practices.

Reduced cost possibilities include training, personnel, building/locations and the expense of rehiring in the event of losing an employee. Credit unions share costs in the form of a CUSO and reduce their overall fixed expenses.

By working with a CUSO, credit unions can more quickly launch a viable and thriving member business lending program, which in turn helps increase the volume of good business loans and also works to build a quality reputation for the credit union. Building an internal member business lending program is a lengthy, expensive and uncertain venture. Savvy credit unions will avail themselves of the services of an experienced and committed CUSO partner, both aiding the overall economy and their own bottom lines.

Kent Moon

Kent Moon

Mr. Moon has been active in the national small business market for over 39 years. Before joining MBL, he was a Senior Vice President of Zion’s First National Bank ... Web: Details