Credit unions are emerging as a very good source for small commercial loans. As short as seven years ago, credit unions made less than 1% of all new commercial real estate loans in the country.
The Credit Union National Association now estimates that its member institutions hold almost 6 percent of small business loans in the U.S., totaling $40 billion. That is an enormous increase in such a short period of time. Credit unions are actively filling the void left when commercial banks across the country sharply cut back their volume of new commercial real estate loans.
Credit unions are planning an even larger foray into small business lending. Lending by credit unions to businesses is currently limited by law to 12.5 percent of total assets, a substantially more restrictive limit than that imposed upon commercial banks. Legislation is pending in Congress to expand the limit to 27.5 percent of assets.
Credit unions offer lower rates for small commercial real estate loans than commercial banks. The reason why is because credit unions are exempt from Federal taxation.
Credit unions will also lend more dollars. We got a quote from a credit union today of 80% loan-to-value. Eighty percent!!
So where can you find credit unions hungry for small commercial real estate loans. C-Loans.com is an excellent place to start. Dozens of credit unions have recently joined C-Loans in search of good small business loans. You can submit your commercial loan to 750 different banks, credit unions, conduits, life companies and private commercial lenders in just four minutes using the C-Loans Commercial Mortgage Portal. And C-Loans is free!
Another way to find hungry credit unions is to identify all of the credit unions located within a 30 mile radius of the subject property. Credit unions are strictly local lenders, so you need to find nearby credit unions for your deal.
So how do you actually find these credit unions? Simply go to maps.yahoo.com and type in the address of the subject property. Then, in the "Find a Business" field, type in "banks". All of the local banks and credit unions will appear plotted on the map.
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