Business lending is one of the fastest areas of growth for credit unions, but veterans of the sector say that the key to success is focusing on the broad needs of members, not just building a bigger loan portfolio.
Much of the growth in business lending has occurred in the wake of the Great Recession, which means some lenders have limited experience with market reversals.
Business lending has higher margins than other lines, but it also has higher risks, and credit unions need to be prepared for them, said Stephen K. J. Mackowitz, who has been lending to businesses for 40 years and is SVP of commercial lending at Digital Federal Credit Union ($7.6 billion in assets, 623,265 members).
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