Webinar highlights CU benefits in SBA programs

March 4, 2015

ALEXANDRIA, Va. (3/5/15)--Member business lending at credit unions has increased steadily for the past 20 years, even through the financial crisis, according to the National Credit Union Administration. The NCUA and Small Business Administration (SBA) hosted a joint webinar Wednesday to explore some of the benefits credit unions and their members can receive through government programs.

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According to a poll taken at the webinar, 28.1% of attendees have a member business loan program and use SBA programs; 29.7% offer business loans, but do not use SBA programs; and another 20.1% do not offer business loans but are "thinking about it."

Credit unions are limited in their member business lending to no more than 12.25% of their assets. However, the SBA guarantees a significant portion of loans through its programs, and that amount does not count against the cap.

Currently, the SBA guarantees up to 85% of loans up to $150,000, and up to 75% on all other loans up to $5 million. The agency guaranteed $19.2 billion in loans in 2014, a record amount, and requested an authorization level of $21 billion for this year.

According to SBA staff who presented at the webinar, a member business lending department at a credit union should consist of: risk-focused staff; a risk assessment, rating process and monitoring; and independent loan reviews.

The webinar comes on the heels of a memorandum of understanding between the NCUA and SBA, as well as CUNA's efforts to connect credit unions interested in a small business program with SBA resources. In addition, the NCUA has launched a vendor research portal, and a new webpage with small business lending resources.

The NCUA will post an archived version of the webinar within the next three weeks.