Northwest Corporate CU doing well out of the gates with its business services CUSO; loan size not as small as expected

PORTLAND, Ore. – For Northwest Corporate CU, being the first corporate credit union to the party seems to be paying off. The $1 billion corporate launched its business services CUSO -CU Business Group LLC (www.cubusinessgroup.org) – earlier this year at a time when other corporates were talking about getting into the business arena. Hiring two veteran bankers, each with over 20 years commercial lending experience, CU Business Group opened its doors in August and has already seen a lot of activity. The latest news is that it has signed on four new credit union clients: Fibre FCU, U-Lane-O CU, Point West CU, and White River CU. “They’re all signing up for the membership package, which really lays the (business services) program out for the credit union, including consulting to help them get going,” said CU Business Group President/CEO Larry Middleman. With the membership package, CU Business Group essentially teaches the CU what they need to do to get a program up and running. Membership ranges from $5,000 to $15,000 based on the size of the CU. After that, there’s a fee for any loan CU Business Group assists in underwriting. Credit unions see CU Business Group as an accelerator of what it would have done on its own. “To form our own program, including hiring the right people, would take at least six to nine months. With CU Business Group, we can have a complete business services program up and running within 30 to 60 days,” said Larry Hoff, president/CEO of Fibre FCU. Middleman said CU Business Group has already provided underwriting for $2 million worth of business loans, and there are many more in the pipeline. He’s been somewhat surprised at the size of some of these loans. Credit union trade associations and NCUA Board members alike often tout the need for small businesses such as lawn services and cleaning services to get funding from CUs, however CU Business Group has seen some relatively large loans. For example, there was a commercial real estate loan for $400,000 and a $1.25 million loan (a participation) in the works for heavy equipment used for rock crushing in a quarry. Of course there are smaller ones mixed in, such as a $44,000 loan for equipment for an embroidery company. “When combined we’re probably averaging loans of $250,000. We would expect credit unions to target a niche of $250,000 or less,” said Middleman. CU Business Group is no longer just Northwest Corporate’s. Last month FirstCorp, Phoenix, took an equity stake in CU Business Group, and Middleman said a lot of other corporates are interested. “I still see corporates being in an excellent position to offer this type of service. I guess it helps that we were first, but any corporate could do this if they put forth the resources. Several corporates have a lot of interest in what we’re doing,” said Middleman. WesCorp is also getting more active in business services, recently hosting educational sessions on business services that were facilitated by the Small Business Administration and consulting firm Counter Intelligence Associates. Other corporates are working on business programs as well. [email protected]