The short answer
A credit union can make a business or commercial real estate loan to a member. First confirm the business can join. Then check two limits: the aggregate cap on member business loans, which is 1.75 times net worth for credit unions that are not exempt, and the limit to one borrower, which is the greater of 15 percent of net worth or $100,000. Many credit unions also buy pieces of larger loans.
The steps in short
- Confirm the business can join. Read the credit union's membership rules or ask. The borrower must be a member before the loan closes.
- Check the single-borrower limit. Take 15 percent of the credit union's net worth. If your loan is larger, ask whether it sells participations.
- Check room under the cap. On the lender page, read the estimated cap and the share used. An exempt credit union has no cap.
- Look for the kind of loan. Read the commercial loan lines and the loans made this year for your kind of loan.
- Call the business lending team. Ask who handles commercial loans. It may be a team inside the credit union or a service organization it owns with others.
How credit union business lending is different
A credit union is owned by its members and lends to them. Its business lending is governed by NCUA’s rule at 12 CFR part 723 and, for state-chartered credit unions in some states, by a state rule that NCUA has accepted in its place.
On this site 1,718 NCUA 5300, credit unions report commercial loans, and together credit unions hold $202B NCUA 5300, in commercial loans. Nearly all of it is real estate: $190B is commercial real estate, and credit unions hold 5.6% of the commercial real estate on the books of all the lenders here. They are a real source of loans for apartment buildings, owner-occupied buildings and small investor properties.
Step one: membership
The borrower must be a member. Each credit union has a field of membership written into its charter: an employer, an association, a community, or some mix. The tie that defines the group is the common bond.
For a business loan the practical questions are:
- Can the business entity itself join, or does an owner join?
- Is the business inside the community the credit union serves, if it has a community charter?
- What does joining take? Usually a share account with a small deposit.
The answers differ by credit union, and the public file does not carry them. Ask first. A package sent to a credit union the borrower cannot join is wasted work.
Step two: what counts as a commercial loan
Part 723 defines a commercial loan as a loan, line of credit or letter of credit, including unfunded commitments, “for commercial, industrial, agricultural, or professional purposes, but not for personal expenditure purposes.” It then leaves several things out. Among them:
- loans secured by a 1- to 4-family residential property, “whether or not it is the borrower’s primary residence”;
- loans fully secured by shares in the credit union or deposits in other financial institutions;
- loans secured by a vehicle manufactured for household use;
- loans to a borrower and its associated borrowers that together come to less than $50,000.
So a loan on a four-unit rental is not a commercial loan under this rule, and a loan on a five-unit building is.
A member business loan is a slightly different set. It is any commercial loan except a few that the rule takes out of the cap: loans that a federal or state agency fully guarantees or has committed to buy in full, loans to non-members and non-member participation interests bought in line with the rules, and loans fully secured by a lien on a 1- to 4-family dwelling.
Step three: the aggregate cap
The limits in 12 CFR part 723
| Limit | Rule | What it says |
|---|---|---|
| Aggregate member business loans | 723.8(a) | The lesser of 1.75 times actual net worth, or 1.75 times the minimum net worth the Federal Credit Union Act requires |
| One borrower or group of associated borrowers | 723.4(c) | The greater of 15 percent of net worth or $100,000, plus a further 10 percent of net worth if that excess is fully secured by readily marketable collateral |
| Exempt from the aggregate cap | 723.8(d) | Credit unions with a low-income designation, participants in the Community Development Financial Institutions program, those chartered to make member business loans, and those with a history of primarily making commercial loans as of the 1998 Act |
Two details change the arithmetic.
What counts against the cap is a net balance. Under 723.8(e), the net member business loan balance is the outstanding balance plus unfunded commitments, less any portion secured by shares or deposits, by a lien on a member’s primary residence, or carrying the guaranty of a federal or state agency, or “sold as a participation interest without recourse.” A credit union that sells pieces of its business loans frees room under its cap.
Many credit unions are exempt. A low-income designation removes the cap altogether. A lender page here says so when NCUA’s file shows the designation.
A credit union page prints an estimated cap, the business loans outstanding and the share of the cap used. The estimate is our calculation from the Form 5300, treating the statutory minimum as a share of assets. It is not a statement from the credit union.
Looking for a lender now? Find lenders for this in your state or see Credit unions with business loans state by state.
Step four: the limit to one borrower
Every credit union’s commercial loan policy must cap loans to one borrower or group of associated borrowers at the greater of 15 percent of net worth or $100,000, with a further 10 percent of net worth for amounts fully secured by readily marketable collateral. The part of a loan that a federal or state agency guarantees is left out of the limit, which is one reason credit unions use SBA programs.
Net worth is the base. That makes a credit union’s ceiling easy to estimate: find net worth on its page and take 15 percent.
Worked example (hypothetical). A credit union has total assets of $800,000,000 and net worth of $80,000,000. It holds $95,000,000 of net member business loans and has no exemption.
One borrower. 15 percent of $80,000,000 is $12,000,000. That is larger than $100,000, so $12,000,000 is the ceiling for one borrower and its associated borrowers.
The cap. 1.75 times actual net worth is $140,000,000 ($80,000,000 times 1.75). Say the statutory minimum net worth for this credit union is 7 percent of assets, or $56,000,000. Then 1.75 times that is $98,000,000. The cap is the lesser of the two, $98,000,000. The 7 percent is this example’s assumption.
Room. $98,000,000 less $95,000,000 leaves $3,000,000. A request for a $5,000,000 loan on an apartment building fits under the single-borrower ceiling and does not fit under the cap. The credit union could still make the loan and sell a $2,500,000 participation without recourse, which would bring the amount counted to $2,500,000.
The lesson: read both numbers. A credit union can be large enough for a loan and still have no room for it.
Collateral, guaranties and policy
The current rule dates from 2016 (81 FR 13554, March 14, 2016) and is built around a duty to write and follow a commercial loan policy. On November 4, 2026 NCUA removed a transitional provision that had expired; the limits described here did not change. Three points from the current text:
- Collateral. A credit union “must require collateral commensurate with the level of risk associated with the size and type of any commercial loan.” If it lends unsecured it must document the factors that offset the risk.
- Personal guaranty. If it does not take the full and unconditional personal guaranty of the principals who control the borrower, it must document the factors that offset that risk.
- Loan to value. The policy must set loan to value limits for each kind of collateral. The rule itself sets no ratio. For a construction or development loan, collateral value is “the lesser of the project’s cost to complete or its prospective market value.”
Each credit union’s policy is its own and is not public. Ask what it says.
Participations
A credit union that likes a loan and lacks room for all of it can sell pieces to other credit unions. Under 12 CFR 701.22 the originating lender must keep an interest for the life of the loan, at least 10 percent of the outstanding balance if it is a federal credit union. A buyer’s policy must limit what it buys on any one borrower to 15 percent of its net worth unless NCUA waives the limit.
1,168 NCUA 5300, credit unions on this site reported buying participations. That is the public sign of a credit union that takes part in larger loans. See loan participations explained.
Who to reach
Business lending is often a small team, and some credit unions run it through a credit union service organization that underwrites for several owners. A general member service line will not know the commercial team. Ask for business or commercial lending by name. See finding the right person.
What the public record shows, and what it does not
It shows: net worth, commercial loans outstanding by kind, loans made so far this year by kind, participations bought, and whether NCUA lists a low-income designation. Credit unions report loans made during the year, which bank call reports do not.
It does not show: who can join, the credit union’s own policy limits, its rates, or whether it wants your loan. The cap and the single-borrower figures on a page are estimates. Our calculation from public filings, as of the report date. Not a rating, and not a statement about safety or deposits.
Questions to put to the credit union
- Can this business join, and what does that take?
- Do you have room under your business loan cap, or are you exempt?
- What is your policy limit for one borrower?
- Do you underwrite in house or through a service organization?
- If the loan is larger than you can hold, do you sell participations?
Want a person to check the public record for a business loan? Request financing from The Lender Report’s operator. A person replies by email, usually naming lenders that have made loans like yours. It is free, it covers business and investment property loans only, and nothing is sent to a lender.
Terms used here
- Credit union: A member-owned cooperative lender. It lends to the people and businesses inside its field of membership and files a call report with NCUA every quarter.
- Member business loan (MBL): A credit union's business-purpose loan to one of its own members. The total of these loans is capped by federal law; loans to non-members are counted separately.
- Member business loan cap: The legal ceiling on a credit union's member business loans: 1.75 times its net worth, or 1.75 times the net worth a well capitalized credit union must hold, if that is less.
- Field of membership: The set of people and organizations a credit union's charter lets it serve. A borrower has to fall inside it and join before the credit union can lend.
- Common bond: The tie that members of a credit union share. Federal law names two kinds, occupation and association; a community charter is defined by place instead.
- Low-income designation: An NCUA status for a federal credit union when a majority of its members are low-income by the rule's test. It lifts the cap on member business loans.
- 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.
- 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.
- 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.
- 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.
Sources
Every rule and outside figure above comes from one of these, opened on . Dates are the source's own. Figures from this site's data carry their own source and date beside them.
Next step: check the record
- Credit unions that make business loansCredit unions that report commercial loans, with the size of the book and loans made this year.
- Search credit unions that buy participationsCredit unions that reported buying pieces of loans made by other lenders.
- Loan Comps for a business loanBanks and credit unions that hold or made loans like the one you describe.
Keep reading
- Legal lending limit estimate: The most a bank can lend to one borrower, from public capital figures. Always an estimate.
- Deal summary builder: Turn the facts of a deal into a clean one-page summary you can copy or print. Nothing is saved or sent.
- 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.
- How to read a credit union's 5300 call report: Credit unions file their own call report, NCUA Form 5300, every quarter. For commercial loans it says more than a bank's report does: it counts the loans, and it reports what was made during the year.
- 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.
- The legal lending limit, explained: A bank may not lend more than a set share of its capital to one borrower. The rule explains why a large loan gets shared, and why a lender can say a request is too big for it.
- How to place a commercial loan with a bank: A bank loan moves through the same stages every time. Knowing them tells you what the bank needs at each point, what its answer means, and where time is lost.
- What a lender-ready loan package looks like: A lender decides in minutes whether to keep reading. A package that answers the first five questions on one page, and backs each answer with a document, gets read.
Questions people ask
Does my business have to be a member to borrow?
Yes. A credit union lends to its members. Whether a business can join depends on that credit union's field of membership, which is set in its charter. Ask the credit union before you prepare a package.
What is the member business loan cap?
Under 12 CFR 723.8 the aggregate limit on net member business loan balances is the lesser of 1.75 times the credit union's actual net worth or 1.75 times the minimum net worth the statute requires. Credit unions with a low-income designation and some others are exempt.
Does a credit union require a personal guaranty?
The rule does not make it mandatory. A credit union that does not take the full personal guaranty of the principals who control the borrower must document in the loan file the factors that offset the risk. In practice most ask for one.
Cite this
Source: The Lender Report, How to place a business loan with a credit union, https://lender.report/guides/place-a-business-loan-with-a-credit-union/, data as of November 11, 2026.
General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.
Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem