Credit Unions Barely Scratch the Surface of Commercial Lending

Commercial real estate

Credit unions’ lending outlook continues to be strong. Loan balances have grown at or near double figures over the last four years, and CUNA reported that credit unions are more than doubling the pace of all other lenders. This milestone can partially be attributed to an increase in automobile loans, which account for more than one-third of credit unions’ loan portfolios, while first-lien mortgages remain the heavy hitters. Although credit unions have been successful in facilitating auto and home financing, too many institutions are still missing a significant opportunity by remaining hesitant to embrace commercial lending.

As credit unions look toward adding the next trillion to their portfolios, savvy institutions are considering how they can best derive revenue from the largely untapped commercial lending market. There is good reason credit unions have traditionally shied away from this segment – commercial loans are notoriously tedious, manual and paper-based. However, this no longer has to be the case. If credit unions adopt the right mindset and technology, they can make commercial lending a competitive differentiator.