Loan Participations Yield Stronger Balance Sheets

By Ian Lampl, Co-Founder and CEO, LoanStreet, Inc.

Loan Participations have become much more accessible to all credit unions and can be a great tool for pursuing higher yielding investments and diversifying beyond traditional fields of membership and specific areas of lending expertise.

That is exactly what hundreds of credit unions have done since January 2020, and especially since the beginning of the COVID-19 lockdown that disrupted regular originations in many loan products and geographic areas.

Whether you are a pro at loan participations or brand new to the concept of buying and selling, LoanStreet, a SaaS provider of loan participation support to credit unions, has proven that there is a safe, efficient and reliable way to manage these transactions at scale with a large number of trading partners but without any corresponding increase in administrative burden!

This has already been a pivotal year for participations.  As institutions large and small search for ways to mitigate the effects of NIM compression, reduced organic loan demand (aside from residential) and declining fee income, year to date, LoanStreet has placed well over $200 million in unsecured personal loans via more than 100 unique participation transactions. The credit story for this asset class is that it continues to outperform some of the most optimistic expectations while offering participants an attractive yield with a short average life. By sourcing deals like this, LoanStreet supports credit unions of all sizes, from those with less than $10M to multi-billion-dollar organizations – and their members.

LoanStreet was founded so that credit unions could safely and securely support one another within the industry and continue to honor the “people helping people” commitment that sets them apart.  To learn more, please contact Bonnie Doolin at 508-509-6643.