ARLINGTON, Va.—Credit unions' commercial and member-business loans currently make up an average of about 10% of annual loan originations – compared with an average of 1.9% 10 years ago, according to NAFCU's latest Economic & CU Monitor survey results.
Results found that 100% of respondents offer loans specifically targeted to small-business owners, and a combined 25% of credit unions offer special loans tailored to meet the needs of women- and minority-owned businesses.
Also of note, 100% of survey respondents are currently using Small Business Administration 7(a) loan products and 75% are providing CDC/504 SBA loans. Credit union representatives have testified on behalf of NAFCU before Congress on two separate occasions this year on the importance of these SBA loan products, NAFCU noted.
Credit union respondents noted that their business loans tend to be small, with the vast majority in 2016 being at or below $250,000. Sixty-five percent of credit union respondents' MBL originations were below $100,000 – compared with only 6% of banks' business loans as of March.
NAFCU said that it continues to reiterate to regulators and lawmakers that the statutory cap on the aggregate amount of MBLs that credit unions can make is a hindrance to those institutions that want to do more to help their small-business members.
Also housed in this month's Monitor are the results from the July Credit Union Sentiment Index (CUSI), a composite index based on NAFCU member responses to eight questions on growth and earnings outlook, lending conditions and regulatory burden. The index can range from 0 to 100; a score of more than 50 indicates a generally positive or optimistic outlook.
This month's CUSI showed slight improvement overall with a reading of 60.4, up from 58.3 in June. Three of the four component scores improved, with lending making the biggest leap as respondents noted a more positive outlook for both loan demand and applicant quality. Most respondents see their regulatory burden as higher than a year ago, and the outlook for the next 12 months declined somewhat from June, NAFCU reported.