In its annual survey released in April by the Silicon Valley Leadership Group, an organization of 200 companies that employ more than 250,000 people and generate $1 trillion worth of business, CEOs said they are hoping for the best but bracing for the worst.
To that end, $363 million Alliance Credit Union has launched Small Business FinanceWorks, a suite of online tools through online banking provider Digital Insight to come to the aid of Silicon Valley companies. The solution aims to help streamline billing and invoicing, expand credit card processing, and introduce remote deposit and payroll services. The offerings are free to all Alliance CU business checking members. The San Jose, Calif.-based Alliance said it is the first credit union in Northern California to offer SBFW. Thirty-five financial institutions nationwide are now using Digital Insight's creation.
"Many [small businesses] are seeing a slow down in their business just like large corporations," said Melina Schoonover, assistant vice president of electronic and retail delivery at Alliance. "Regardless of the economy, however, small business members need to get the most out of every penny and have a reliable source to manage their money."
Alliance's business members automatically receive SBFW within their online banking service to manage receivables and payables, track invoices, send reminders and account for profitability, said Schoonover. Since its debut in late March, nearly 330 accounts have been opened. The credit union is scheduled to conduct a service usage analysis at the end of April to determine the adoption rate.
When Digital Insight approached Alliance in early November 2008, the credit union was ready to test out SBFW on some its business members, Schoonover said. Alliance has been a client since April 2007 and had initially approached Digital Insight in early 2008 about a small business partnership. At the time, the company was not ready to roll out its new platform. In addition to Schoonover, Marketing Supervisor Mark Mendez, Marketing Coordinator Heather Wheeland and Emily Harper Condon, senior vice president of marketing and retail delivery, assisted with the launch of SBFW.
"We are excited about this product and that [DI/Intuit] offered it to us first to grow our small business portfolio," Schoonover said.
The fit works given that Alliance's business members are mostly sole proprietors, small office/home office and a few limited liability companies. The majority have one to five employees and encompass industries such as janitorial and housekeeping, consulting, contractors/construction/home maintenance, landscaping, salons, graphic design, computer and Web services, realty/property management, doctors offices and law offices.
"We know there are other members that run SOHOs and probably haven't opened a business checking [account] yet," Schoonover said. "We hope that by offering these low-cost services they'll see the value of business checking."
In addition to new services, Alliance was scheduled to offer a free seminar, "Taking Steps in a Downturn Economy," on April 23, co-presented with the Silicon Valley SCORE. Alliance was set to cap off April with a small business workshop where attendees were to receive advice from the SBFW product development team on its business finance management software. Participants will have a chance to win one of two $250 office supplies gift cards at the workshop.
While Alliance has offered business checking for years, it does not offer commercial loans, Schoonover said. By offering smaller loans, lines of credit and business credit cards, the credit union wants to build its program to the point that it can fulfill all of a small business owner's financial needs. Regardless of the industry, a firm with less than 10 employees is not that difficult to analyze using tax returns and financial statements, Schoonover said.
"If we can get comfortable starting small to gain the expertise, which increases member loyalty at the same time, we just might find ourselves playing in the business lending arena to a greater extent in a few years," Schoonover said.