PARTICIPATION LENDING
Loan participations help credit unions improve their loan-to-share ratio, increase return on assets, diversify their portfolio, and bolster liquidity. Thorough due diligence is essential to manage the process and mitigate risks. We offer a comprehensive service which includes sourcing quality loans, lead lender reviews and Master Participation Agreement negotiations.
Thorough Lead Lender Evaluation
We meticulously review the capabilities and regulatory compliance of each Lead Lender to ensure proper risk identification and mitigation.
Independent Assessment
Our team acts as an independent third party, ensuring unbiased assessment and adherence to conservative credit union standards.
Risk Mitigation
By performing sensitivity analyses, providing recommended risk ratings, and conducting thorough property inspections, we help mitigate risks and maintain the integrity of your commercial loan portfolio.
Participation loans referral / underwriting
At CU Strategic Services, our dedicated team of highly trained analysts underwrite commercial participation loans, allowing credit unions without a fully built-out commercial lending department to benefit from solid commercial loans without the added expense. As an independent third party, we source high quality participation opportunities originated by other lenders, ensuring unbiased assistance to help your credit union secure the best loans while maintaining conservative standards. Additionally, our analysts can act as an impartial third-party underwriter for any other participation opportunities your credit union encounters. If you already have a qualified team of underwriters, CU Strategic Services can serve as a referral source for participation loans without providing underwriting services.
Lead Lender Review
CU Strategic Services reviews the capabilities and expertise of each Lead Lender in order to determine their ability to properly assess the creditworthiness of a borrower while conducting proper risk identification and mitigation. In addition, we review the Lead Lender’s adherence to regulatory requirements and industry standards, as well as their practices to monitor their portfolio and loan performance on an ongoing basis.
Loan Participation Agreement Consulting
CU Strategic Services collaborates with legal counsel to meticulously review participation agreements prepared by the Lead Lender. This thorough review process allows us to identify potential issues and concerns, ensuring all parties can achieve their objectives seamlessly.
Periodic Loan Reviews
Periodic Loan Reviews are an essential element of commercial loan portfolio management. Our team monitors the credit quality of your participation loans throughout the life of the loan. Our experienced credit analysts conduct a review of the Lead Lender's periodic review as well as an independent financial analysis of the supporting financial statements, tax returns and credit reports. In addition, we prepare a sensitivity analysis and provide a recommended risk rating.
Site Visits and Property Inspection
Our team performs or engages trusted business partners to perform property inspections of collateral properties securing your participation loans. Collateral inspections play a critical role in remaining informed of the condition, safety, and value of the property. By identifying unreported vacancies or potential issues early and providing actionable recommendations, inspections help mitigate risks, prevent costly surprises, and ensure the long-term integrity and satisfaction of property investments.
Frequently Asked Questions
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Yes, our team has spent years working in commercial lending departments in various financial institutions. We have helped multiple credit unions start commercial lending programs and would love to work with you. Contact us for more information on how we can help!
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Unlock new revenue streams and diversify your lending portfolio with participation lending. Reach out to us for more information and join our list for access to the latest loan opportunities.
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Participation loans offer an excellent opportunity to diversify your portfolio across various geographic locations, NAICS sectors, and property types. Reach out to us, and we'll discuss the specific loans or areas you're interested in. Together, we can develop a strategy to help you successfully diversify your portfolio.
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CU Strategic Services collaborates closely with lead lenders to collect all necessary data at loan origination and throughout the servicing period. Our team also conducts independent reviews of the lead lender’s underwriting and periodic assessments to ensure that, as a participant, you receive a comprehensive loan package and a thorough understanding of the associated risks.
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Yes! Contact us to discuss your loan portfolio and explore how we can help expand your lending capacity.
Ready to join forces?
Contact us for a custom proposal based on your credit union’s needs.