Loan Zone: How the pandemic and PPP have ‘turbo-charged’ new business lending strategies
SBA program opened the door to small business members, but credit unions should act fast to strengthen these new relationships.
It’s been more than four months since the coronavirus pandemic halted the U.S. economy, closing businesses and offices across the country. Many credit unions that participated in business lending had portfolios heavily focused on commercial real estate lending—today, they are recognizing the need to diversify and expand their business member banking model to reduce CRE concentration risk.
“The pandemic almost turbo-charges the transition that credit unions need to take away from a CRE-only focused model,” Jim Hanson, principal at JDH Consulting, noted on a recent Abrigo webinar, “Crisis Business Membership Strategy in 2020: Adapting Technology and Executing in the New Normal.”
The Small Business Administration’s Paycheck Protection Program, aimed at mitigating the economic impact of the pandemic on small businesses, has been a critical foothold for community financial institutions seeking to obtain and diversify their business lending relationships.
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