A Sept. 11, 2013, story in Credit Union Times (Small Business Owners’ Plea to Credit Unions: Earn My Business) reported on a focus group of small business owners who generally concluded that credit unions are having a hard time serving their needs compared to banks.
This may well be a case of “perception is reality,” and may once again point to the need for the industry and individual credit unions to do a better job of promoting small business services. For instance, while the article cited high praise for the friendly service of credit unions, it also recorded the worry that branches were not easily accessible to small business employees. Of course, the credit union industry’s shared branching network addresses this concern, with more than 5,000 live teller branches and 2,000 other self-service locations—a network larger than all but three national banks.
Small business is the lifeblood of America’s economy, and we shouldn’t hesitate to say credit unions have often been the lifeblood of small business.
Credit unions, in fact, are go-to institutions for small business loans. A study by the Small Business Administration found that from 1986 to 2010, small business lending at banks decreased while lending by credit unions increased dramatically. After the 2001 recession, small business lending growth at credit unions kept growing at a rate of more than 20%. Credit union lending growth continued, though at a lower rate, even after the more recent recession that began in 2008. During this time, lending generally declined, especially from banks.
And, there are many other ways that credit unions are helping small businesses in their community in creative, non-lending ways. Here are some ideas for you, if you haven’t implemented them already.
Organizing Cash Mobs
A cash mob is an event which consists of community members gathering to help local merchants by purchasing goods and services from the shops to bolster sales. ORNL Federal Credit Union of Oak Ridge, Tenn., for instance, announced earlier this year that it will host a series of cash mobs to help promote and support two locally owned businesses in its East Tennessee service area each month. For ORNL FCU, the concept of a cash mob is one that fits perfectly with its core value of community improvement.
Taking the cash mob concept one step further, Navy Federal Credit Union in Norfolk, Va., recently gave $20 “Navy Federal Loyalty Cards” to the first 100 shoppers who participated in a cash mob event. Representatives from the credit union’s business services group also handed out free T-shirts.
Other credit unions sponsoring cash mobs include Ohio Health Care Federal Credit Union in Dublin, Ohio; NuPath Community Credit Union in Wyandotte, Mich.; and Public Service Credit Union in Romulus, Mich.
Recognizing Good Works
Recognizing the good works of local business is another creative way to help boost local merchants. Bethpage Federal Credit Union’s Central Islip branch hosted its second annual Hispanic Business Owner of the Year Award.
The award program is an outgrowth of the Hispanic Initiative, established by the Stony Brook University Small Business Development Center that runs under the New York State Small Business Development Center and OLE, the Organization of Latino Entrepreneurs. The initiative’s goal is to support and promote Latino business owners, and for Bethpage FCU it is an impactful way to reach out to the Hispanic community as future members.
Next Page: Being Business-Friendly
Firefighters Community Credit Union of Cleveland, Ohio, is also a business-friendly institution that offers financial counseling and other assistance to its members—not just firefighters—who own local businesses. Through a partnership with Accel, a financial counseling firm based in Farmington Hills, Mich., FCCU provides to its members such free online services as confidential credit counseling, financial education, housing counseling and optional debt management services.
Providing special services to its small business members, CommunityAmerica Credit Union in Kansas City, Mo., has a web page dedicated to assisting business owners with online advice on insurance, assets, liabilities and employee benefits. The web page also includes an article entitled 7 Ways to Keep Your Business on a Profitable Path.
Woodland, Calif.-headquartered Yolo Federal Credit Union hosts free workshops year-round for small businesses and non-profits that feature guest speakers who are experts in their field and provide relevant information for business owners.
With its eye on helping its members who own small businesses, Glacier Hills Credit Union of West Bend, Wis., hosts an annual Memberfest, which features a series of workshops including clinics aimed specifically at managing small businesses, as well as a business showcase, providing an opportunity for local merchants to build their networks. The credit union is planning a new web site for launch later this year that will offer members promotional and other online support including free business listings.
Another way credit unions can help local merchants is through rewards programs. Shop Main Street from CO-OP Financial Services provides credit unions with special marketing and sales tools to help local businesses such as flower shops and grocery stores. Through the combination of a cardholder rewards program and a more robust online presence—the latter, a specific point of contention for the focus group cited in the Credit Union Times article—credit unions help small businesses not only with their financial needs, but helps them grow their customer base.
Credit unions can be and are natural partners to local businesses. Because of their recognized high service standards, the business-oriented services they offer are good business for everyone.
Michelle Thornton is a senior product manager at CO-OP Financial Services.
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