Know the players. Visit lending partners, look at their operations and servicing, and interview their underwriters, advises Jeremy Gilpin, EVP of Greater Commercial Lending, the nation’s largest bioenergy and biochemical USDA lender. Ask for files and information so the credit union can complete its own underwriting. Don’t take anyone’s else’s word for it.
Use outside experts but understand the loan. Gilpin also suggests, generally, sticking with areas in which the credit union has in-depth education and experience. Collaborate with others when it isn’t cost effective to have a certain specialized expertise in-house.
Be cautious about staffing expectations. One person can’t bring in deals, underwrite the loans, and handle servicing, says Mark Rosa, CEO of Jefferson Financial FCU, the lead lender in a $112.6 million biorefinery loan. Jefferson Financial devotes five employees to its commercial lending and also relies on partner CUSOs.
Augment internal efforts through collaboration. Organic growth might be ideal for a credit union with an internal commercial department, but it can take time to build that, says Bill Mullally, senior managing director of CU CMS. An experienced commercial lender can analyze potential participations quickly and supplement internal efforts until internal growth gets the program to a sustainable level. Make sense of deposit data for individual branches, institutions, and entire markets. With BranchAnalyzer, the ability to make smart tweaks to your branching strategy is just a click away.
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