For decades, credit unions were known primarily for consumer lending: auto loans, mortgages, and serving tightly defined membership groups. Business banking? That was the traditional banks’ territory. But the tide is turning, and quickly, when it comes to credit unions’ target accounts.
At a recent America’s Credit Unions Business Banking Roundtable, one message came through loud and clear: Many credit unions are aggressively and intentionally expanding into commercial and industrial (C&I) lending.
We’re not just talking about dabbling in commercial real estate (CRE); credit unions are building real business banking programs focused on lines of credit, working capital, treasury management, and SBA lending. This shift represents a tremendous opportunity for credit unions to broaden their membership, strengthen their talent pools, and deepen their community ties.
Indeed, many credit unions are uniquely positioned to serve small and lower middle-market businesses that often feel overlooked by banks. But, this expanded opportunity comes with a very specific challenge: competition.
As credit unions move into C&I lending, they’re stepping directly into the arena with banks that have decades of commercial experience. It’s hard to avoid making a David versus Goliath analogy.
To win these deals, credit unions can’t rely on relationships alone. They need industry insight, disciplined targeting, and stronger advisory conversations, which is precisely where Industry Intelligence from Vertical IQ can become their strategic advantage.
Building a C&I program from the ground up
There’s one key difference between traditional banks and credit unions that are entering the C&I lending space: Banks are often focused on optimizing an existing foundation. Credit unions, on the other hand, are building the foundation itself.
To this end, many credit unions are hiring experienced bankers away from traditional banks. In fact, at the America’s Credit Unions conference, roughly 60% of attendees raised their hands when asked if they were former bankers. That tells you something important: Credit unions are investing in expertise, credit risk management, and sales training.
But even with strong talent, they need scalable insight into industries and risk. This is where Vertical IQ plays a critical role, equipping credit unions with the Industry Intelligence they need to pursue C&I opportunities strategically, confidently, and competitively.
Vertical IQ helps credit unions target the right C&I opportunities
As credit unions expand into serving businesses, success doesn’t come from chasing every opportunity that walks through the door. It comes from choosing the right industries, the right prospects, and the right relationships — those that align with the credit union’s risk tolerance, growth goals, and deposit strategy. That kind of focus requires more than enthusiasm; it requires insight. That’s where Vertical IQ becomes essential.
Smarter industry targeting (not ‘spray and pray’)
When building a business portfolio, you can’t take the “spray and pray” approach (like pulling a Chamber of Commerce list and hoping six companies call you back). Vertical IQ helps credit unions:
- Identify industries that align with their credit risk appetite
- Understand industry trends and current conditions
- Avoid “throw everything against the wall and see what sticks” prospecting
Instead of random outreach, lenders can focus on industries that:
- Fit their underwriting comfort zone
- Show favorable financial benchmarks
- Align with their strategic growth plan
That’s disciplined growth.
Aligning with credit risk profiles
As credit unions step into C&I lending, many want to be conservative. They’re understandably mindful of loss ratios and charge-offs. Vertical IQ’s industry data and financial benchmarks allow them to:
- Compare borrower performance to industry norms
- Understand typical leverage and liquidity metrics
- Evaluate risk factors unique to specific sectors
This ensures they’re not just growing, but growing wisely.
Hunting for deposits … strategically
Credit unions have always been deposit-driven institutions. Through Vertical IQ’s financial benchmarks, lenders can identify industries with higher cash-to-assets ratios, which often translate into stronger core deposit opportunities and treasury management needs. Instead of hoping deposits follow loans, they can:
- Target industries known for stronger cash positions
- Structure conversations around liquidity and working capital
- Offer ACH, cash management, and payment solutions where they’re truly needed
That’s a proactive deposit strategy, not reactive selling.
Preparing for better conversations with business owners
Here’s something else that’s critical for credit unions to understand: Many small and lower middle-market businesses don’t have a full-time CFO, board of directors, or in-house legal team. Owners therefore often make decisions based on:
- What they hear in the news
- What peers are saying
- What “everyone’s talking about”
This creates a tremendous opportunity. When a credit union relationship manager walks into a meeting with a business owner armed with industry-specific insights like current conditions, risks, challenges, and benchmarks, they can easily elevate themselves from lender to trusted advisor.
And here’s another advantage to tap into: Credit unions still see meaningful foot traffic in branches. That creates opportunities for:
- Informal business conversations
- Sharing industry reports
- Following up with value-added insights
Vertical IQ equips frontline staff and relationship managers to engage confidently, whether it’s a scheduled meeting or a spontaneous conversation in the lobby of the credit union.
Differentiating yourself in the financial landscape
So how do credit unions differentiate from banks? It comes down to four main areas:
- Access and attention: They strive to give borrowers direct access to lenders and business development officers.
- Community presence: They have a willingness to go on-site, tour facilities, and truly understand operations.
- Advisory conversations: With the help of Vertical IQ, they can speak intelligently about industry risks, competitive pressures, margin trends, and cash flow realities.
- Strategic focus: They can target industries that match both their risk tolerance and their deposit strategy.
When a credit union shows up prepared, informed, and invested in the business owner’s success, that’s a powerful differentiator.
The competitive advantage credit unions can’t ignore
Credit unions’ push into C&I lending isn’t a passing trend; it’s a strategic evolution for them. They’ve broadened membership. They’re recruiting experienced bankers. They’re investing in sales training and credit infrastructure. Now they need the right tools that help them strengthen underwriting, improve their targeting, elevate conversations with businesses, and differentiate them from larger competitors. This is why Vertical IQ can be instrumental for credit unions building out their C&I lending programs.
Winning in business banking isn’t always about being the biggest institution in town. It’s about being the most prepared. And when credit unions combine their relationship-driven culture with tailored Industry Intelligence from Vertical IQ, they’re positioned to win C&I deals exactly where it matters most: on Main Street.
Learn more about how Industry Intelligence from Vertical IQ can help your credit union’s C&I strategy. Request a free demo today!
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