The CUSO Advantage

Fortunately, CUSOs offer several distinct advantages when it comes to supporting and helping credit unions capitalize on the participation opportunity. Here are three reasons working with an experienced business lending CUSO is the best choice:

Independence from all parties: The asymmetric information problem described above is real. In such situations, a CUSO is in the perfect position to provide an unbiased, objective view and improve the level of confidence on both sides. Whereas the individual buyers and sellers in a transaction may have conflicting motivations, the CUSO is committed to serving all its credit union clients and ensuring the deal is done right. All business services CUSOs provide some level of lead lender pre-screening to ensure they have a well-structured commercial lending program and can handle the extensive borrower due diligence, reporting and documentation required to manage the deal. For example, CUBG reviews critical factors like the lead's loan servicing capabilities, depth of experience and the historical success of its program. Before you're ready to dive into the pond, having your CUSO lifeguard conduct a thorough lead lender pre-screening will help instill confidence and trust.
An extensive, established network: Some CUSOs specializing in commercial lending work with dozens (or hundreds) of credit unions eager to buy and/or sell commercial loans. For example, CUBG has been in business for 17 years, and as the industry's largest business services CUSO, works with 585 credit unions across the U.S. Both buyers and sellers can tap this deep network with minimal effort instead of dropping a line in a murky pond.
Unmatched expertise and guidance: For credit unions seeking to test the commercial lending waters through buying participations, a lack of expertise and staff resources are critical barriers to entry. CUBG and other business lending CUSOs offer decades of experience working with lenders with varying risk appetites. By serving credit union clients in multiple, regionally-dispersed markets, such CUSOs are also able to develop extensive industry and market intelligence over time. They can offer relevant expertise and guidance to even the most seasoned commercial lenders.

In addition to the above benefits, the CUSO also serves as a "one-stop-shop" for buyers and sellers, leveraging their specialized expertise at every step of the deal, including lead lender pre-screening, borrower due diligence, participation loan servicing and even assisting in workout situations. Most importantly, tapping a CUSO-vetted network of motivated buyers and sellers introduces a sea of opportunity and establishes a higher level of trust.

Instant Insights /

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