Nearly a year after Michigan CU Capital launched a statewide lending brand that would connect small businesses to credit unions, the effort has added another level to increase its exposure.
With a soft rollout in May 2011, MCUC has been working with the Michigan Business Connection LC, a commercial lending and underwriting CUSO, to help credit unions share costs and expertise while creating a collective brand that symbolizes a commitment to the best practices in small business lending.
In March, MCUC launched a Facebook page that features business lending articles and success stories. The entity has transformed from a CUSO to a collaboration of credit unions sharing their experiences, said Bill Beardsley, president of MBC in Ann Arbor, Mich.
“We’re rooted in believing in an effort to be more collaborative than competitive,” Beardsley said. “This is a bottom up strategy not led by a trade association or someone’s agenda.”
Social media channels such as Facebook aim to help MCUC promote Michigan’s credit unions and how they’re helping small businesses, Beardsley said. Because of their massive outreach potential, social media is very grassroots, which can help businesses find their way to credit unions that are enthusiastic, capable and credible to serve their needs, he added.
While there are more than 300 credit unions in Michigan, Beardsley said only a handful have been effective in building their brand within the commercial borrowing community. Still, the state’s credit unions have helped to provide more than $1 billion in loans.
“Banks have substantially more assets and identity than credit unions,” Beardsley said. “If you look at recent data, business loans at banks are down but those at credit unions have substantially increased. This is not because credit unions and CUSOs have been great marketers of loans. Loan growth is coming from businesses seeing credit unions as a credible source of financing.”
The $1.5 billion Lake Trust Credit Union partnered with MBC several years ago to develop commercial loan participation opportunities and to provide lending solutions for its business members, said Robert Hensley, vice president of lending at the cooperative in Lansing, Mich.
In 2011, Lake Trust identified significant opportunities to work with small and medium sized businesses, located in the communities the credit union serves, he noted. It created a business financial services group to develop or expand relationships with its existing and new business members.
The business services officers serve as the primary relationship manager and handle all loan requests, working with its MBC partners for loan underwriting, servicing and portfolio management needs, Hensley explained. They also partner with the branch managers to coordinate delivery of the non-credit services and the development of the consumer relationships with the business owners and employees.
During the implementation of its business financial services strategy, MBC introduced the MCUC initiative. Hensley said Lake Trust’s original business financial services model was designed around the business services officer managing most of the relationships. However, with the MCUC focus on the small business owner, the credit union recognized this as a great opportunity to expand its reach in the business community and maximize its resources.
The business services officers are now focused primarily on the larger member business relationships and lending opportunities while the branch managers work directly with the MCUC team to provide loan services and serve as the primary relationship manager for small member business relationships, typically those with borrowing needs of $100,000 or less.
Hensley said once Lake Trust implements the strategy later this spring, the MCUC team will work closely with the branch managers during the loan origination and closing processes to ensure what he describes as a superior member experience as well as provide underwriting, servicing and portfolio management support.
“Our relationship with Michigan CU Capital will enhance our member business lending capacity and enable Lake Trust to provide competitive loan products with a high level of service that helps ensure the success of our small business members and provides growth for the Michigan communities that we serve,” Hensley said.
The $1.4 billion Genisys Credit Union in Auburn Hills, Mich., said its alliance with MCUC and MBC helps reinforce its commitment to its current business members and businesses in the community with their small business lending needs, said Lori Daniels, lending development manager.
“We feel that Michigan Business Connection can help us do that with making the lending process more efficient and economical. Michigan CU Capital brand will compliment all credit unions involved in the program,” Daniels said. “It allows everyone to offer a full lending program with MBC's lending expertise.”
Beardsley cautioned that credit unions should not make every loan but there should be a space for small businesses to turn to if they’re looking for financing alternatives.
“We’re not promoting a product here. This is more of an industry wide, collaborative message so people can get excited about what credit unions can do,” he explained. “That can come from borrowers impacted by credit union support and credit unions working together.”