A lender that buys a share of a loan another lender originated. It takes part of the credit exposure, usually without dealing with the borrower directly.
The participant is the buyer in a loan participation. It funds part of the loan and takes that share of the payments and of any loss, while the originating lender stays on the contract with the borrower.
NCUA’s rule puts the work on a credit union that buys. The loan must be a kind the buyer is empowered to grant. The purchase has to meet every rule the buyer would face if it had originated the loan, including the limit on commercial loans to one borrower. There must be a signed participation agreement. And the buyer’s own written policy sets underwriting standards and ceilings: purchases from any one originating lender no more than the greater of $5,000,000 or 100 percent of net worth, and purchases tied to one borrower or associated group no more than 15 percent of net worth, unless NCUA’s regional director waives a ceiling.
A borrower rarely meets the participants, but they affect timing. Each buyer runs its own credit review, so a participated loan can take longer to close than one a single lender holds.
How it shows up in the data here
The participations filter lists credit unions that bought commercial participation interests in the first half of 2026 or held non-member commercial loans and participations at June 30, 2026, with the dollar amounts from the 5300. Those are the buyers. The data does not show whose loans they bought, and it has no equivalent field for banks.
Go further
- Credit unions that buy participations: Bought in the first half of 2026 or held at June 30, 2026.
- Loan participations, explained: A participation lets one lender make a loan that is too large for it to hold alone. The borrower signs with one lender. Behind that lender, others own pieces of the loan and share its risk.
- A credit union lender's guide to working with brokers: Brokers bring loans a credit union would not otherwise see. Taking them well means four checks before credit: can the borrower join, is there room under the cap, is the loan inside the limit to one borrower, and who pays the broker.
Related terms
- Loan participation: A loan in which other lenders buy shares from the lender that made it, under a written agreement that keeps the first lender in the loan for its whole life.
- Originating lender: The lender the borrower first contracts with, which then sells participations in the loan to other lenders and stays in the loan itself.
- Credit union single borrower limit: The most a credit union may lend in commercial loans to one borrower or group of associated borrowers: the greater of 15 percent of its net worth or $100,000.
- Credit union service organization (CUSO): A company that credit unions own or lend to, set up mainly to provide services to credit unions or their members. Some underwrite and service business loans.
- Net worth ratio: A credit union's net worth divided by its total assets, as a percentage. NCUA treats 7 percent or more as well capitalized and 6 percent as adequately capitalized.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.