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CU System
Biz-lending collections topic of CUNA Council paper
MADISON, Wis. (11/6/09)--A rare confluence of events is occurring in the American economic landscape that offers credit unions once-in-a-lifetime business lending opportunities, according to the CUNA Lending Council. Banks and other lenders are restricting credit to established business owners and the growing pool of new entrepreneurs laid off from corporate and other jobs during the recession. Evidence indicates that credit restriction will continue. The CUNA Lending Council recently released a white paper, “Business Lending Collections,” which offers insight into the specialized field of collections. The paper contains interviews with credit union lenders about the state of business lending and collections in the industry. Also included is information on third-party collections, negotiating with business owner members, recognizing red flags, creativity in collections and telephone call tips. Several credit unions view the current environment as an opportunity to lend to small business owner members. They are ramping up their business lending portfolios and fine-tuning their business lending collections departments. Business collections--like business lending--succeed or fail depending on the quality of the relationship developed and nurtured. “The key to effective business-lending collections is relationships--how you treat people,” notes Bill Klewin, associate general counsel, CUNA Mutual Group, Madison, Wis. “You have to find people who work well with others, who have exemplary people skills.” An August Federal Reserve survey in reported that 55% of banks said their lending standards for business loans would remain tougher than long-term average levels until the second half of 2010. In the same survey, one in four banks said they decreased the limits for business credit cards over the past three years. Most bankers said their standards for credit card loans to their best customers would remain tighter than normal into 2011 and beyond.
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