Participation loans are loans that are made by multiple lenders to a single borrower.

Typically, the borrower is looking for a loan for commercial real estate or some other kind of asset which may be too large of a loan for a single financial institution to carry on its books.

Midstreet Capital works both inside and outside our network clients to participate in these loans, giving financial institutions the opportunity to accept transactions that may be of greater asset quality, limit risk and increase net interest income.

In participations, there will be an originating lender that takes the lead and absorbs at least 10% of the transaction. The borrower is required to be in the originating lenders footprint prior to finding the additional institutions to purchase a portion of the loan until that total amount is satisfied.

While working within our network, we work with our partner institutions to originate the loan, take responsibility for the services of the participation, organize and manage the participation and deal directly with the borrower. Credit risk is shared by all participating institutions.

The primary reasons that credit unions utilize participation loans are as follows:

  • Increase Investment Income with High Quality Participation Loans
  • Portfolio Diversification
  • Higher Yielding Assets
  • Reduce Risk and Exposure

Rest assured, our highly experienced advisors are here to guide you through every step of the process. Speak to one of our expert consultants today and find out how we can help your institution leverage participation loans to achieve your long-term goals.

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