A couple of weeks ago I attended American Banker’s Small Business Banking conference. It remains one of my favorite conferences because the focus is always so intense on how to take small business lending to the next stage. The conversations this year were no less focused, but the one trend I saw that was different this year was that this small business lending conference seemed to have more conversations about how we can make the life of the small business owner easier versus what we can do for the lender.
Looking at the phrase “risk appetite”, there is more to it than just looking at the types of loans the credit union is willing to lend money for. Step one would be to determine their market area and the types of industries it determines is a part of their overall risk strategy. Step two would be to establish on-going risk management to underwrite the credit and step three to establish effective portfolio management after a loan is made.
Benjamin Franklin, once said, “When you are finished changing, you are finished.” This is great advice for any of the us regardless of our line of business or the markets we served. However, in lending that rings particularly true.