Serving small businesses
Find an outside partner to work with on SBA loans.
One in five credit union members either own or operate a small business out of their home. With more than 32 million small businesses in the U.S. employing more than 61 million employees, there’s a very good chance credit union members fall into this demographic.
That’s something lending departments should take into consideration, according to Barry Sloane, CEO of Newtek Business Services Corp., a CUNA Strategic Services provider.
“It’s important to be able to serve this demographic so that the businesses in your community can thrive,” Sloane said during a breakout session at the 2022 CUNA Lending Council Conference Thursday in San Diego.
However, while credit unions of all sizes can offer SBA loans, they may require assistance from an outside loan service provider, Sloane notes.
“You can’t do it with a conventional lending staff,” Sloane says.
A specialized team—including underwriters and loan closers—that is familiar with the 1,600 page SBA policy and procedure manual will be needed. This team will come at a high cost and is why credit unions often choose a loan service provider to work with.
These partners provide experience, dedicated SBA loan professionals, software, will be able to integrate into your accounting systems, and have the experience needed to handle repair and denial issues that could arise.
“SBA and small business lending should be a part of your repertoire to serve all of your members’ interests in their respective communities,” Sloane says.