By Karen Hodgkiss
Jim Devine is founder, chairman, and CEO of Hipereon, Inc., and a specialist in commercial lending and credit administration. In January 2013, he discussed The Business Lending End Game in a post for CUES Skybox. With the start of a new year, this may be a good time to review Jim’s advice in the form of self-assessment to see how well your Member Business Lending (MBL) program is doing.
Jim said, “Member business services may be an oasis for thirsty income statements.”
- Are you seeing an increase in income from business lending and other business products?
- How does the income compare to the associated costs in serving this market?
He expressed concern about the lack of experienced business lenders through the industry, and advised that credit unions “invest in underwriting and loan origination training” to develop their bench strength.
- Have you taken advantage of opportunities to strengthen your lenders’ skills in areas such as interviewing, underwriting and collections?
- Do you feel confident that you have the right people in place who can deliver these services to your members?
One goal with your credit administration process is to head off surprises. Jim puts it this way, “Is the borrower walking the talk and doing what was promised and expected when the loan was originated?” If not, then you’ve got problems.
- Are your risk identification systems working properly so you are seeing yellow flags before they become red flags?
- Is the quality of your portfolio improving over time?
MBL is not for the faint of heart. But done right, you can meet members’ needs and give a boost to your income statement, while managing an appropriate level of risks.
Karen Hodgkiss is a freelance writer.
Experienced business lenders and senior credit union executives who attend CUES Advanced School of Business Lending™ will insure their credit unions do business lending right. Mark your calendar for March 3-7, San Diego, and register today.
