Nuts, bolts of CUNA's MBL program outlined

MADISON, Wis. (3/31/03)--Two important developments converged early this year to make member business lending easier for credit unions: the Small Business Administration (SBA) offered a new legal interpretation that opens its guaranteed loans to all credit unions and the NCUA proposed new regulations to ease some limitations on credit unions offering these loans. So says Mary Dunn, CUNA's senior vice president and associate general counsel for regulatory affairs, during a CUNA audio conference.

To help credit unions start making member business loans (MBLs), CUNA recently agreed to create a program with Newtek Small Business Finance Inc. John Cox, the company's chairman and CEO, spent many years working at the SBA.

Through the Newtek/CUNA alliance, credit unions can refer members interested in MBLs to CUNA's Web site to access the tool, or credit unions can be involved with reviewing documentation and underwriting the loans, Cox said during the conference.

Michael Hearne, SBA lending consultant for CUNA, credit union board member, and former SBA employee, says the program aims "to provide a resource for credit unions that don't have the resources or the wherewithal to start up a program."

Among the major advantages of becoming involved with the SBA loan guarantee program, said James Hammersley, SBA director of loan programs division, is that credit unions can make loans they might not consider making without a guarantee. In addition, the SBA backs long-term business loans with terms up to 25 years.

Discussing CUNA's new small-business lending program at an audio conference Friday are, from left: John Cox, chairman and CEO of Newtek Small Business Finance Inc.; Mary Dunn, CUNA's senior vice president and associate general counsel; and Michael Hearne, Small Business Administration consultant for CUNA.