The local machine shop that needs $500,000 to finance a new CNC machine and woodworker who wants to start producing birdhouses on a large scale.
Both are opportunities for credit union to assist businesses with the fund needed to finance projects. And also form lasting relationships.
“We have the opportunity to get out and do different types of lending,” Dana Sumner, president/CEO of DFTC Inc., said during a breakout session Tuesday at the CUNA Lending Council Conference in Anaheim, Calif.
Commercial and industrial (C&I) lending focuses more on establishing a long-term relationship with the business rather than a single transaction. But it also requires credit unions to approach the loan differently, Sumner says. Some of these difference include:
Credit unions are in the prime spot to explore C&I lending opportunities since they’re relationship-based, Sumner says.
“What do we create as lenders? Files. That’s not too sexy,” Sumner says. “But when you’re driving in your community and you pass a business where you funded equipment and that created jobs, that’s sexy. And it raises up the community. Not only does it make the small businesses stronger, but it also makes the credit union stronger.”
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