CU Business Group, a nationwide business lending CUSO with 470 client credit unions, has announced a deal to allow its member credit unions easier access to Jack Henry & Associates' Margin Maximizer Interactive, a business loan platform which allows a credit union to more efficiently price business loans.
"We leverage Margin Maximizer Interactive to competitively price commercial deals and large retail opportunities," Jeff Fiedler, EVP of finance at the $1 billion Advia Credit Union, a CUBG client. commented,
"The tool enables us to evaluate members from a holistic perspective, considering the profitability of their relationship and empowering our lending department to respond accordingly," he said. "As a result, we are able to offer better, faster service in a highly competitive marketplace."
The alliance comes after a record-breaking year for small business lending. The U.S. Small Business Administration announced that it approved 52,044 loans for $19.9 billion in its fiscal year 2014, an increase of 12% in number of loans and 7.4% in dollar amount over fiscal year 2013.
As credit unions become even more active in business lending, CUBG is encouraging members to use a risk-based, holistic and quantifiable pricing methodology via a simple, yet comprehensive tool like MMi, the CUSO said.
"Credit unions are becoming more sophisticated in business lending, and leveraging tools like Margin Maximizer Interactive is a practical and beneficial way for them to ensure their pricing is consistent and profitable, Larry Middleman, CUBG president and CEO, explained.
"In addition to enhancing the returns on loans, MMi helps credit unions gain a financial perspective of the full member relationship with an applicant, which often results in better loan pricing as the share of wallet with business members increases," he added.
It's this part of the MBL process which can make the loans so hard to price, Middleman explained. A credit union pricing a member business loan also has to take into account other loans that the borrower might bring, as well as other potential deposit accounts and other business generally.
Very few business loans can be seen in just their own terms. Middleman added.
"Pricing can be a challenge for credit unions; Margin Maximizer Interactive allows them to make swift and efficient decisions based on the calculated data points that examiners want to see," Russ Bernthal, president of ProfitStars, the division of Jack Henry that developed MMi added.
"This alliance makes it easy for CUBG's clients to access MMi, enabling them to improve their commercial portfolios and proactively address examiner concerns. It is also evidence of our mutual dedication to providing credit unions with the tools to better compete in their markets while further enhancing efficiencies."
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