By Ray Birch
LOMBARD, Ill.—Credit unions this year have a big opportunity to expand their business lending, according to Raddon–but a lot of that will depend on the performance of front-line staff. Raddon told CUToday.info that a number of market and economic factors that influence business lending are aligning favorably for credit unions now: new MBL rules, strong credit union membership growth and public image, in addition to growing confidence among small businesses over their own futures. The result: many are ready to expand their borrowing.
Raddon research shows that 19% of small business owners have used an online lender, which is certainly influencing their perception of what the loan process looks like, especially regarding speed, Rothaar said. “There is a growing segment of small businesses that are demanding more of an online loan experience versus the traditional process,” he said. CUs also need to address their pricing, as Rothaar said he believes banks’ pricing is more aggressive.“This may speak to the level of risk credit unions are willing to take on in the business lending space,” he said. The best place to reach out to expand business lending is with existing members first, said Rothaar. “Our research shows there are many business owners who have a retail account at the credit union but not any business services,” Rothaar said. “This is the low-hanging fruit. Identify these members, and the tellers can help here.”