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Pennsylvania CU MBL growing at brisk pace
HARRISBURG, Pa. (11/12/10)--Credit union member business loans (MBLs) are growing at a brisk pace in Pennsylvania to help small businesses gain access to credit despite a tight economy. The Pennsylvania Credit Union Association (PCUA) recently told a local business journal that MBLs grew between 5.2 % and 6.7% each quarter during the past five quarters (Central Penn Business Journal Oct. 15). That compares to a national annual rate of 18% in 2008, 10% in 2009, and 7.7% through June of this year, according to Credit Union National Association figures quoted in the article. MBLs are defined as loans of more than $50,000 used for business or agriculture made without the backing of the U.S. government. Nationwide, CUNA figures show MBLs grew 7.7% in the first six months of 2010; 10% in 2009; and 18% in 2008. MBLs at Pennsylvania credit unions made up 3.1% of all loans in June, compared with 6.5% nationwide. The PCUA said Pennsylvania credit union MBL programs developed more slowly than in other states because Pennsylvania has a higher share of small credit unions. Fewer than 10% of the state’s small credit unions offer MBLs, compared with more than 60% of those with assets over $100 million. Members 1st FCU, Mechanicsburg, which has $1.8 billion in assets, is among the leaders in offering MBLs and ranks 10th in the nation in loan volume with more than 2,000 loans valued at $263 million. In comparison, $175 million asset AmeriChoice FCU, Mechanicsburg, makes about 100 MBLs annually with an average loan size of roughly $100,000. Everence FCU, Lancaster, formerly Mennonite Financial FCU, has assets of $110 million and a loan portfolio that typically ranges from $15 million to $17 million. The article highlighted a small businessman who owned a Hanover-area RV dealership and lost his bank financing--a victim of the current credit crunch that began in earnest in 2008. After having a dozen banks turn down his request for credit for inventory, the business owner saw a Members 1st sign advertising business lending. He soon got an appointment with the credit union and a line of credit, which since has been expanded and extended.


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