PPP loans just may have awakened credit unions to the immense opportunity there is in small business lending. That’s what Sherif Hassan, CEO of fintech Capiform, believes. The opportunity is there.
But to win that business credit unions need to speed up their lending process, said Hassan, and they also need to create a more efficient process that cuts costs.
Automation – smart technology – is the key. At many credit unions, the typical cost for funding a small business loan is around $3600, said Hassan. Capiform’s tools get that cost down to maybe $360.
At that cost, suddenly making smaller loans – maybe $50,000 or $75,000, loans that often are what small businesses want – is realistic.
Community banks have long had a lead in small business lending, but CU2.0 Podcast listeners recently heard Steve Bruyn of Foresight Research say that his data shows a huge drop in customer satisfaction at community banks. That’s an opportunity for credit unions.
Add in the comfort many credit unions gained in the PPP program – where they learned they could successfully deal with small businesses and also with the federal government – and the path to more loans for credit unions is clear.
It comes at an ideal time. Many credit unions are drowning in deposits. Small business loans are a profitable path to safety.
Don’t many fintech lenders want that same market? They do. But credit unions – with their community focus – have a fast track to succeeding in that battle. Listen up as Hassan tells why.
You may have heard Hassan’s earlier podcast. Here’s a link.
Listen up here.
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