Private label business lending offers a world of options to credit unions. However, as you look at different available programs, some key things to consider include:

Your credit union is, in essence, originating the loan for a commercial bank, so trust in this relationship is critical. You'll want to be sure the commercial bank is only in it for the loan, not to solicit and steal your members.
Your credit union should get all related deposit accounts, and everything else in the relationship–the private label lender only gets the actual loan.
Watch for large minimum volumes or quotas required by the private label lender. I have seen programs that have no minimums, and others that require as much as $5-$10 million in private label volume per month which is much more than most credit unions can produce.
The program should offer flexibility in pricing and terms allowing your credit union to maintain some control over the final offer to your business member.
Turnaround times should range from 30-60 days for specialized programs. The better the package submitted up front, the smoother and faster the process will go.
Some private label programs offer full support for underwriting, origination and due diligence–others don't. Be sure you know what is expected of your credit union from a loan origination and workload standpoint.
Above all, there should be no surprises along the way. Hidden costs or other "11th hour" issues can put your credit union in a tough position with the borrower. Make sure you fully understand every aspect of a private label business lending program before taking it public.

Credit unions face significantly more hurdles than banks in business lending. Offering a private label business lending program that complements the credit union's business program will certainly increase your odds of hitting a home run with your business members.

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Private Label Business Lending--It's a Whole New Ballgame!

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