Business Lending (Credit/Loans Facilities)

Increasing Business Lending in Credit Unions

One method through which credit unions can enhance their business lending is by striving to raise their capitalization to or above a seven percent net worth ratio. Additionally, electing reliable and capable leaders with proficient skills in underwriting and business servicing can significantly contribute to achieving remarkable historical performance. Maintaining appropriate business records and books, subject to audit, and ensuring good standing are also essential factors.

Restrictions on Business Lending in Credit Unions

Credit unions face various restrictions on business lending, including legal and mandatory requirements that must be met for the unions to qualify for loans (Pride, Hughes & Kapoor, 2005). These restrictions encompass considerations beyond capitalization and current cap requirements. Factors such as management proficiency and the maintenance of comprehensive business records are also evaluated. Additionally, credit unions must demonstrate a minimum of five years of positive member business lending experience. Personal liability and compulsory complex guarantee requirements further shape the loan process.