An online marketplace that connects financial institutions looking to purchase loans with those who are selling loans is the premise behind BP Connect, a new venture from Business Partners LLC, a business lending CUSO.
Sellers can post the loans they have available for viewing by interested buyers. Potential buyers can also view available loan bundles and receive a daily alert with newly posted loans., according to BPLLC in Chatsworth, Calif. The CUSO said its existing standards and platform allow participating institutions to complete their due diligence process.
For financial institutions seeking to remix their balance sheets, BP Connect aims to provide a channel to purchase or sell residential real estate, auto loans, credit cards and just about any type of consumer loan, according to the CUSO. Because business loans are BPLLC's core product, they will not be offered on the online exchange, said Jean Faenza, president/CEO of BPLLC.
"With this new participation marketplace, it's easier than ever for financial institutions to manage liquidity, reduce their concentration risk and diversify their portfolios," Faenza said. "We've removed the middleman and created an environment where buyers and sellers can easily find each other and conduct business using our advanced loan participation platform and tools."
The service went live Jan. 19, Faenza said. So far, three credit unions have signed on. To participate in BP Connect, credit unions must be current Business Partner clients. There is a monthly subscription fee and a 50% discount for those that belong to a CUSO.
Established in 1995 by the $416 million Telesis Community Credit Union, BPLLC serves more than 200 credit unions and has more than $1.5 billion in business loans under asset management. BPLLC said it has underwritten over $35 billion in business loans and has expanded its product offerings to include third party underwriting and audit services for other lenders.
In 2010, Telesis was involved in several legal attempts to recover on defaulted commercial real estate properties. The latest involved a Tennessee office building foreclosed on by Telesis five months after the developer defaulted on a $3 million loan. The $416 million credit union recently filed a second foreclosure notice on the property.
In November 2009, Telesis and BPLLC filed a breach of contract against the owners of an Orlando shopping mall after the owners filed for bankruptcy. Since at least last year, Telesis had also been working to settle a $6.8 million Oregon property loan for an office building. The case was placed in bankruptcy court.