Outside the commercial real estate box

Credit unions must learn to provide operations funding and expert advice if they want to become strategic business lenders.

Credit unions want to be relationship lenders, but when it comes to business members, they’re primarily product lenders—they finance one piece of a business’s credit needs: commercial real estate. CUs often struggle to provide business operations funding and some of the more complex deposit services that go with operations.

$19 billion BECU, Tukwila, Washington, like most CUs that do business lending, is mostly a commercial real estate lender, but it is starting down the relationship path. More than 90 percent of BECU’s $1.3 billion business loan portfolio is CRE, says Scott Strand, CCE, SVP/member lending, business and wealth management. “We do some unsecured lines and business credit cards, but the vast majority of our loans are commercial real estate,” he concedes.

That will change, but not dramatically, he predicts. “We have 50,000 business members with over $750 million in deposits, so the potential is definitely there to do more business operations lending. Small business is a powerful growth area. We’re upgrading our deposit services around business needs and doing more with treasury management, adding staff that specializes in business relationship management,” he reports.


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