Frequently Asked Questions

If your credit union is low on liquidity or struggling with stagnant loan growth, selling or buying a loan pool is likely your answer. But it’s known to be a time-consuming hassle when credit unions manage the process on their own. So, we’ve made it our mission to simplify the process as much as possible. Our fully-secured Loan Participation Platform provides a one-stop online shop for buyers and sellers to connect and participate painlessly. Plus, our team of experts provide hands-on support and trusted service to help facilitate the transaction and guide you through the process. So, whether you’re new to participations or experienced with the process, loan participations are a viable balance sheet management solution.

• Hassle-Free – Alloya’s Loan Participation Platform brings credit unions together to help each fulfill respective balance sheet needs through a fast, secure and convenient online platform.
• Fully Transparent – In addition to streamlining the process from weeks to just days, full financial transparency between buyers and sellers distinguishes our program from others.
• Cost-Effective – Alloya offers a low-cost, full-service solution, making our Loan Participation Program among the most affordable and competitive in the marketplace.
• Service-Oriented – Alloya’s Loan Participation experts are your credit union’s consultants – providing personalized service throughout the process to support credit unions and streamline transactions. Our focus and priority is to ensure your credit union’s needs are met.
• Largest Cooperative Network – Alloya’s Loan Participation Program offers the largest cooperative network in the nation.

1. Membership – Credit unions must become an Associate or Capital Member of Alloya. Keep in mind, capital is not required for membership with Alloya. Learn more.
2. Premier View Access – Alloya’s Loan Participation Platform is accessible through a single sign-on in Premier View, Alloya’s one-stop transaction system. Therefore, new members will pay the associated Premier View fees to gain access to the Loan Participation Platform.

Alloya’s Loan Participation Platform transforms a convoluted series of steps into an automated, seamless transaction. What once took weeks, now takes days. A basic summary of the transaction is provided below.

1. Establish a Loan Participation Policy – Your credit union’s policy must specify the ability to purchase loan participations, and parameters for doing so, including but not limited to:
   • Underwriting standards
   • Limits on purchases from a single originator
   • Limits by loan type and amount
   • Limits on the concentration of single borrowers or groups of associated borrowers
     See NCUA’s final rule and Requirements for Loan Participation Purchases for details (p. 37950). Visit Buyers page for a sample policy.
2. Monitor and Evaluate Loan Pools for Sale – If you see a potentially suitable loan pool, sign a Letter of Intent for access to the selling credit union’s due diligence package and loan-level data.
3. Review Due Diligence and Sample Files – Review due diligence documentation provided by the seller in our secure Loan Participation Platform. Once satisfied and ready to purchase, sign the commitment.
4. Closing – Once due diligence has been performed, and the commitment signed, a closing date will be set. At the closing, an updated balance of each loan will be provided. Alloya will provide a Participation Certificate to seller and buyers within the Loan Participation Platform to sign on closing day. After signing, funds will be transferred between accounts at Alloya.
5. Monthly Payments – The buyer will receive pro-rated monthly principal and interest payments (less the servicing fees).
6. Monthly Reports – Buyers will be able to review monthly summary reports, remittance and trial balance details for all pools. Alloya will also provide a quarterly call report aggregating all pools allowing you to easily complete your own call report.

Alloya’s Loan Participation Platform transforms a complex series of steps into an automated, seamless transaction. What once took weeks, now can take just days. A basic summary of the transaction is provided below.

1. Establish a Loan Participation Policy to support the sale of loan participations.
2. Provide loan portfolio data for analysis and reports.
3. Provide sample data files for review to validate data for sales and monthly remittances.
4. Upload organizational due diligence information.
5. Provide loan pool data files for each pool to be sold,
6. Monitor transactions and provide final closing data.
7. Sign agreements, exchange loan details and due diligence documentation with the potential buyer.
8. Close the deal within the Loan Participation Platform by signing the Participation Certificate. Funds will be transferred automatically by Alloya between accounts. No more waiting on wires!

Virtually any type of loan or loan pool may be purchased including:

• Consumer
• Real Estate
• Commercial

While Alloya does not perform due diligence on behalf of credit unions, the Loan Participation Platform makes it easy for documentation to be uploaded, shared and reviewed by all parties. When a purchasing credit union is performing due diligence on the seller, they should consider the seller’s financial condition, management bios, lending and collection policies, loan-level data, a sample of the pool and reports.

Contact us to learn more and get started.