Case Study
O Bee Credit Union Launches High-Impact Merchant Buy Down Program with LoanStar
Setting the Stage
O Bee Credit Union is Washington state’s number one rated credit union1 with a rich history tied to the Olympia Brewing Company that has expanded to six locations across the state. In late 2024, they set out to expand their reach beyond the auto lending community and compete more effectively in the home improvement sector. They partnered with LoanStar to help create a turn-key embedded financing program to expand their sourcing and loan capacity.
Navigating the Solution
Initially, LoanStar sourced 15 local merchants to launch O Bee’s program, and additional merchant sign-ups soon followed. However, early loan volume remained low, despite several merchants financing millions of dollars monthly with other providers. LoanStar stepped in to collaborate closely with O Bee and determine the exact cause of the slow sales. The difference was the other provider’s “low rate” programs, which allowed merchants to pay fees to get their customers a lower loan rate.
To differentiate their offering as a regional credit union, O Bee needed a model that protected merchant margins, kept consumer payments transparent, and could scale without straining IT resources. In April 2025, LoanStar worked to adapt this lower-rate program, one O Bee already used in auto lending, to appeal to the credit union’s merchant customers and be sustainable for their size. Together, they created the Merchant Buy Down Program. Instead of absorbing punitive fees around 30% charged by national competitors, merchants working with O Bee could buy down consumer loan rates with a service fee of ~6%. This structure preserved margins on typical jobs while delivering affordable and predictable payments to their customers.
Once the Buy Down launched, production accelerated: monthly volume increased from approximately $100,000 to over $500,000. Since the program’s inception, O Bee’s growth has climbed 1200%. The program’s ripple effects extended beyond just loan growth, a featured merchant reported an over 35% increase in sales this past summer. Home improvement has emerged as an important sector for O Bee, and as a CDFI, these loans can be counted towards expanding their mission of serving the underserved in their community.
1 https://www.obee.com/
“The Merchant Buy Down program has been absolutely game-changing for loan production and volumes for our credit union. The lower rates are so great for the end customer, and that, in turn, makes this program great for our merchants and for us—especially since it isn’t burdening our merchants with heavy fees. Our success all comes down to having a collaborative partner that not only has the turnkey embedded lending technology we were looking for but also provides the business development and support to go with it. The platform is well worth the expense for the experience and expertise that you get with LoanStar.”
Jillian lewis
Director of Indirect Lending, O Bee Credit Union
Why LoanStar for O Bee?
Commitment to credit unions
LoanStar’s roots in the credit union space ensured alignment with O Bee’s member-first values and CDFI mission, making them a partner that understands how to balance growth with community impact.
End-to-end approach
LoanStar offered more than a platform by bringing together technology, merchant relationships, and credit union know-how to make program creation and adoption seamless.
Collaborative program design
Together, O Bee and LoanStar built a differentiated buy down program that gave merchants competitive rates with lower fees—an approach tailored to O Bee’s market and members.
Merchant-focused growth
By equipping local merchants with affordable
financing tools, relationships, LoanStar helped O Bee strengthen support small businesses, and drive a meaningful increase in loan volume.
What goals will LoanStar help you to reach?
Learn more about our turnkey embedded lending solution.