SAN DIMAS, Calif. – In another indication of credit unions’ interest in serving small businesses, four credit unions in the Los Angeles, Calif.-area became authorized Small Business Administration lenders last month after completing a pilot SBA 7(a) lending training program designed and facilitated through a collaborative effort of the Los Angeles SBA district office and WesCorp. The four credit unions – all members of WesCorp – that received the SBA 7(a) Lender designation at a special signing ceremony May 29 at WesCorp’s headquarters in San Dimas were: Priority One CU, South Pasadena; USA CU, Los Angeles; Ventura County CU, Ventura; and Water and Power Community CU, Los Angeles. SBA representatives at the event included Bruce Thompson, SBA Regional Administrator and Alberto Alvarado, SBA Director for the Los Angeles district office, the largest SBA office in the U.S. In 2002, it approved about 3,000 loans worth $1 billion and has led the “Understanding the SBA system can seem daunting, and most people are intimidated by bureaucracy,” said Alvarado. “Our objective was to demystify the process and bring it down to reality. Being an SBA 7(a) lender might be challenging at first for credit unions to do, but once they learn how to do the loans, it’s like riding a bike. It’s really not as difficult as it seems.” The pilot program was the brainchild of WesCorp’s Martin Lawson, director of member credit services, who saw the training program as an opportunity for more credit unions to get involved with SBA lending. Lawson contacted Rick Kresser, chief of the finance division in the SBA’s Los Angeles office, and they got to work with planning the pilot. The eight eight-hour sessions were offered at no cost to the participating credit unions. Sessions focused on various topics and issues relevant to SBA lending such as identifying potential borrowers and prospects, credit analyses, and other member business lending services such as business checking accounts and credit cards. In addition, Counter Intelligence Associates’ Mike Hale, director, member business services and Jim Devine, chairman and CEO, St. George Intergrated Financial Solutions, led a session that provided attendees a template for integrating their training in to their CU’s policies and procedures. Attendees also heard from third-party providers and learned, as one put it, that there are plenty of opportunities for outsourcing and that being an SBA lender doesn’t necessarily mean a credit union has to staff up to provide the service. Nine other credit unions completed the training sessions and are at various stages of completing necessary approvals. Four of these CUs are expected to be approved within the next two months. Thompson said the SBA realizes that credit unions’ experience with making small business loans ranges from no experience to having quite a bit, and going from a consumer lending environment to a commercial lending one “can be quite a transition,” so the SBA wants to be sure credit unions understand what’s involved and there are no misconceptions. “There are 25 million small businesses in the U.S., and we haven’t been able to touch all of them. Credit unions’ involvement in SBA lending opens up the doors of these loans and other SBA services to them,” Thompson said. Commenting on banks’ criticism of the SBA’s decision earlier this year to allow all credit unions to become authorized SBA 7(a) lenders (CU Times, Feb. 26), Thompson said “some banks don’t want to make $25,000 loans to small businesses,” and this is something credit unions are more apt to want to do, consequently increasing opportunities for businesses owned by minorities, ethnic groups, and women. Representing the four credit unions at the signing ceremony were Gary Perez, president/CEO, USC CU; Carl Stewart, president/CEO, Water and Power CCU; Elizabeth Lipke, vice president of lending, Ventura County CU; and William Harris, president/CEO, Priority One CU. Harris and Stewart CU both encouraged other credit unions to “jump aboard and become approved SBA 7(a) lenders.” If credit unions are going to be their members’ primary financial institution, they need to have this product,” Stewart said. Harris said Priority One CU had been approached in the past by members inquiring about small business loans, but until now the CU hadn’t been able to help them. In addition to becoming authorized as a SBA 7(a) lender, Priority One CU is interested in further expanding the CUs’ business services offering and plans to use the services of Telesis Partnerships LLC, a wholly-owned business services CUSO of Telesis Community CU. Water and Power Community CU recently expanded its field-of-membership, and Stewart said the CU’s community charter now includes several depressed areas around Los Angeles. “To help develop these communities, we have to be able to lend money for production. That’s what small business loans do,” Stewart said. “Contrary to what banks want people to believe about small business lending being bank territory, that’s not true. Credit unions started out making small business and agriculture loans. We’re simply returning to our roots,” he added. For the time being, Lawson said WesCorp doesn’t plan on holding additional training sessions. The focus now, he said, is on the authorized CUs producing results and marketing the small business lending services to members. “The bottom line is, members need to be served,” he said. -

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