Participation loan


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Participation loan

A large loan made by a group of lenders, that enables a borrower to obtain financing above the legal lending limit of an individual lender.

Participation

A very large loan made by more than one lender to a single borrower. A participation loan exists when the lenders have a legal limit on the maximum amount they may lend.
References in periodicals archive ?
In a participation loan, lenders will "partner up" in making a loan.
The first year of a participation loan with an origination fee of 1%, interest income of 6% on the portion of the loan that wasn't participated out, and the servicing fee of participation at 50 basis points.
With C-PaL, Navy Federal said it would not take the lead in the participation loan deals, choosing to appreciate and respect the fact that other credit unions may want to maintain current relationships and run the daily interactions with members.
State-chartered credit unions, CUSOs and banks that originate participation loans must retain 5% of the loan, which Matz said is consistent with the Dodd-Frank Act.
"[Park Avenue] Funding is concerned that the bank will again breach its obligations as servicer of the participation loans in an effort to improve its equity capital and appease the FDIC by reducing its concentration in commercial real estate loans," the lawsuit says.
* short-term seasonal financing, contract financing and construction financing (participation loans only).
However, Northwell Health FCU lost $2 million last year because of several taxi medallion participation loans, according to Bethpage.
The decrease in average loan balances was primarily related to a decrease in average participation loans of $12.8 million, due to an increase in payoffs.
In addition, 47 participation loans were delinquent and totaled $3.3 million.
"Needless to say, everything went good for awhile and then the participation loans collapsed regionally," Brandt said.
LendKey currently serves 305 credit unions and community banks, providing online support for private student loans, many of which are participation loans shared among as many as 10 credit unions.
ADED's Small Business Loan Program can provide up to one-half of the amount of participation loans offered approved community lenders.