But or Sell Commercial real estate, mortgage, or credit card loans program logo

A solution for credit unions that would like to buy or sell commercial real estate, mortgage, credit card, and other types of loans through njBIZloan Connection’s participation services.

PCU Benefits

  • Participations are a win-win for all parties
  • Referring credit union adds loans on their books
  • Lead Lender earns points and servicing revenue
  • njBIZloan Connection partnership strengthens

Let one of our specialists provide a free portfolio review and generate a proposal for adding loans, redistributing loan exposure, or lightening up the credit union’s loan portfolio.


Competition is having a profound effect on the volume of direct auto and real estate loans being made by many credit unions these days.  Because these are major finance categories, a growing number of credit unions have found loan participations to be a suitable method of supplementing their usual lending practices and, dealing with other portfolio related matters.

  • We provide credit unions the tools and expertise necessary to buy or sell participations in a safe, sound and compliant manner. .
  • Lastly, today’s participatory environment requires higher levels of due diligence regarding regulatory compliance, vendor management, cost containment, and overall portfolio risk than in the past. As such, njBIZloan stands ready to provide consultative services in these areas to ensure that our clients’  expectations are met.

What buyers and sellers need to know

The advantages of buying high value loan participations are many. In short, they offer credit unions the ability to safely increase their outstandings at will which has proven to be a highly effective means of balance sheet management.

Understanding the techniques of buying or selling a loan participation offers control of these variables:

  • Liquidity
  • Average speed of prepayment
  • Asset quality
  • Credit risk
  • Accurately calculating ‘net’ yield of a pool
  • Being able to perform within 30-45 days of receipt of good data


Buyer’s Readiness to Buy

  • Has the buyer ever purchased any participations in the past?
  • Is the buyer able to accurately interpret the value of a targeted loan pool?
  • Does the buyer have the experience to determine safety and soundness of a pool?
  • Have the buyer’s Loan, Investment and Board policies been updated?


Seller’s Readiness to Sell

  • Does the seller have an accurate estimate of their loan costs re: dealer reserves, cost of capture and origination on direct loans?
    • Does seller have a Master Non-Recourse Loan Participation Agreement?
    • Is a Due Diligence package available for inspection by the buyer?
    • Is the seller prepared to; carry out all servicing responsibilities, deal directly with borrowers on all matters and resolve all legal and compliance issues?


Sample Auto Loan Pool Analytics

  • Current & Original Balance
  • Average Current Balance (show lowest and highest balances in the pool)
  • Weighted Average Current Rate (show lowest and highest interest rate in pool)
  • Weighted Average LTV, FICO DTI and Ranges
  • Weighted Average Original and Remaining Term and Ranges
  • Net yield (including cost of acquisition, loan servicing, estimated losses, etc.)

Types of loan participations

  • The predominant type of loan participation in today’s marketplace is non-recourse between seller and buyer.
  • Loan types eligible for purchase includes loans currently made to a member of the buyer’s credit union or loans they are empowered to make.
  • The maximum loan participation allowable is the greater of $5MM or 100% of net worth. *If a buyer should want to exceed these limits, they must receive permission from their regulator to do so.
  • What types of asset classes are typically available for participation?

Consumer Loans

    • Direct and Indirect Auto
    • Balloon Note Finance
    • Motorcycles / Recreational Vehicles
    • Home Improvement (Installment)

Real Estate Loans

    • Conforming and Non-Conforming Residential First Mortgages
    • Conventional and Non-Conventional Second Mortgages
    • Home Equity Lines of Credit (HELOC)
    • Home Improvement Closed End

The Master Servicing and Sales Agreement

This document is the guiding principle in all loan participation transactions.The purpose of the Agreement is to clearly state the terms of the sale and provide a clear description of originating lender, servicer and participant obligations.  The Agreement is usually approved by the board of directors and member(s) of the senior management team that are well versed in loan participation lending.

Contact us

In particular, we’ve provided loan sourcing and negotiating services to credit unions with great success since 2007.  We work with experienced buyers and sellers who have transacted several billion dollars of loans in auto, real estate and other asset classes – none of which have ever been criticized by regulators or outside auditors.

Our clients benefit greatly in that we’ve been able to simplify the buying and selling process so credit unions of all sizes and appetites can participate with confidence.  We accomplish this by providing guidance on several fundamentals such as; accurate calculations of value, required policy changes, interpretation of the master agreement, board reporting, accounting tips, etc.

To learn more, please consider having a conversation with us so we can learn about your lending goals and objectives, and then talk about how we can assist you in achieving them.


Jim Janota
Consumer Participations Manager
Direct Dial  440.773.6328
NMLS  312832


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