Sunny forecast for member business lending

Are you ready for the strong growth ahead?

A recent Credit Union Management magazine article  addressed what is ahead for lending in 2016, including member business lending. It’s no surprise to those of us who travel the country and work with credit unions on a daily basis that the forecast looks promising. In our home city of Seattle, for example, the construction market is booming. There are over 100 issued permits in downtown Seattle for buildings 10 stories or taller, perhaps the most active construction timeline in the city’s history. Recovery is slower in other areas, such as the Midwest, but it is still steadily improving.

While the slight bump in interest rates last year and another anticipated this year might flatten the mortgage market, it shouldn’t have much of an impact on business lending. This category has experienced double-digit growth over the past few years, which is expected to continue.

What does this mean for credit unions? Many of the organizations we work with are trying to broaden their portfolios from a traditional real estate focus (mortgages) to a hybrid one that includes  commercial and industrial lending. This will necessitate increased competency at these institutions, not only in originating loans, but also in portfolio management.

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