As the commercial real estate market continues to thrive, especially in the multifamily and industrial sectors, the demand for commercial financing to support the country’s development boom is only growing.
That’s why the timing of four Minnesota-based credit unions is so ideal. The credit unions earlier this year launched a new Credit Union Service Organization that is now lending to developers and investors in Minnesota and the upper Midwest.
And the addition of a new lender? That’s good news for developers and investors who are seeking the dollars they need for new construction, acquisitions and refinances.
Named United Financials Capital and based in Minneapolis, the service organization’s founding members are:
- Affinity Plus Federal Credit Union
- Hiway Credit Union
- SPIRE Credit Union
- TopLine Federal Credit Union
Michael Dalglish, chief executive officer and founder of United Financials Capital, said that with demand for commercial financing so high, 2022 was the right year to start this new lender.
“We have been on this journey for a long time,” Dalglish said. “We looked at a lot of different potential opportunities in the market to help our credit union members. One of the areas we thought we could make an impact on was the commercial lending space.”
Dalglish said that the individual credit unions that make up United Financials Capital will benefit from the combined financial power of having four working together. And the hope is that even more local credit unions will join the service organization in the coming months.
“There were financing opportunities that credit unions had to say ‘no’ to because one separate credit union couldn’t provide the funds by itself,” Dalglish said. “The size of the opportunity might have been outside its borrowing limits. Collaboratively as a group, they can now look at these opportunities and collaborate on them together. They can find the deals that are the right fit and move on with them.”
A client might come to one of the credit unions in the new organization and ask for a $20 million loan. In the past, that credit union might not be able to provide that amount of financing. But if it is part of United Financials Capital, it might now be able to provide the funds.
“We’re excited to launch United Financials Capital, moving beyond ideas and discussions to collaborative action,” said Dave Boden, president and chief executive officer of Hiway Credit Union and board chair for the new organization. “We’re here to bring the power of credit union values and the combined resources of our organizations to the commercial lending marketplace. We believe this is just a starting point: Our mission, and obligation, is to serve and support MN credit unions of all sizes We deeply believe we are all stronger if we work together.”
Dalglish said that the organization will focus on deal sizes between $5 million and $50 million.
“Minnesota credit unions have always been at the heart of small and mid-sized business lending for many communities throughout the state,” said Boden, in a written statement. “Combining resources and working together through United Financials Capital, we can extend the reach of credit unions to opportunities often not otherwise available, and truly enable the organizations to be a significant economic engine for growth in Minnesota and beyond.”
Dalglish said that the commercial real estate market is particularly strong throughout Minneapolis and the state of Minnesota today. The demand, then, is there for a new lending opportunity, he said.
“There are a lot of opportunities out there,” Dalglish said. “We are excited about that. We see this market as being very, very strong right now. There are a lot of projects being developed. From all indications, it looks like a lot of those projects will move forward.”
But why should developers or investors work with a credit union lender? Dalglish said that credit unions are community-based and owned by the members of those communities. This means that developers who work with credit unions are instantly connected to those individuals who own the organization. That, Dalglish said, is an important benefit.
“That’s a nice story for those developers,” Dalglish said. “If they work with us, they can say that they are helping an organization that represents 500,000 Minnesotans. There is a benefit there in knowing that the funds ultimately get back to those members who own those credit unions.”
Dalglish said that the reaction to the launch of United Financials Capital has been positive. He said that the organization, which officially launched in January of this year, has already underwritten and collaborated on deals that have gotten funded.