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TUKWILA, Wash. – In a little over two years, BECU’s business services division has made its presence felt throughout the Seattle area. The $6.1 billion credit union is ranked third in the Seattle district area for SBA lending as of Jan. 31, 2006, according to the agency’s office here. For the SBA fiscal year ending Sept. 30, 2005, BECU made 58 7(a) program loans totaling $4,587,700. Since then until Jan. 31, the credit union has approved 36 loans totaling $2,986,300. While it’s far behind the state’s top two SBA lenders, Bank of America and U.S. Bank, it’s tied with Wells Fargo Bank and ahead of KeyBank and Washington Mutual Bank. BECU recently achieved another milestone by becoming the first credit union in Washington to be granted SBA’s Preferred Lender status. The designation allows BECU to secure SBA loan guarantee approval in as little as one day versus five days or more without the designation. Much of BECU’s success has not come from large, million dollar deals but with small and even micro businesses. The credit union’s average loan is approximately $79,000 and most loans fall under the $100,000 threshold with the largest current loan being $375,000. “It’s been a good fit for us,” said Arnie Gunderson, BECU director of small business services. “A lot of our members have small and micro businesses. A lot of our business is coming from nonmembers too.” Gunderson said what helps set them apart from competitors is that BECU does not have a minimum business loan amount. Some area banks have set a minimum limit of $50,000, he has noticed. Another key component is the strong familiarity that BECU’s business services division staff has with SBA loans and the entire process. “It’s not intimidating for us. We’re well-educated in SBA products,” Gunderson said. “With SBA Preferred Lender status, BECU can serve its business members much faster than ever.” Those businesses are all over the spectrum: from home based and self-employed to retail, manufacturing and even a restaurant or two even though “they’re very high risk.” Gunderson said requests for capital from micro businesses can usually be met with a credit card, but should their needs change, a loan is the next step. SBA’s MicroLoan Program provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $10,500, according to the agency. A survey to BECU members nearly nine years ago revealed a desire to have business services and in September 2003, BECU surveyed its members again to get a better grasp of that need. Of the 2,500 that responded, 800 said they were in a decision-making capacity at a small business and 400 indicated they were sole proprietors. BECU’s business services launch occurred on March 1, 2004 at two of its Express Services Centers and eventually rolled out to the entire network. The centers were chosen because of the large number of businesses in the area surrounding one center and the manager’s bank commercial lending expertise at another center, Gunderson said. SBA’s 7(a) loan program is going on its third year in operation at a zero subsidy. CUNA and some members of Congress have expressed concerns about the zero subsidy and its impact on borrowers and lenders having to pay higher fees as a result. Gunderson said for now, it’s not a really big issue but that could change. “It’s not been a problem historically,” Gunderson said. “Time will tell. We can hope that this won’t be a slippery slope. Maybe (the fee increases) will just be a one-time thing and it won’t happen again for a long time.” Meanwhile, BECU will continue to court small businesses through targeted ads in business publications even as a lot of its new business still comes from word of mouth, Gunderson said. -

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