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ST. CHARLES, Mo. – Gary Hinrichs compares the business lending experience for credit unions to the famous Life cereal commercial that spawned one of the most famous catchphrases in advertising history. “I’m not gonna try it. You try it. Give it to Mikey, he hates everything.He likes it, Hey Mikey!” The point? “It’s about building relationships,” said Hinrichs, president/CEO of $89 million West Community Credit Union. “You have to build awareness with businesses. It’s kind of like who’s going to eat first.” For West Community CU, that first step came through an alliance it, along with 17 other Missouri credit unions formed with the Missouri Credit Union Association and Missouri Corporate Credit Union to launch Heartland Business Services, LLC last fall. Each CU owns between one to five units of the CUSO and all have voting rights. MCUA and MCCU own units but do not have voting rights. The CUSO provides credit underwriting services, legal documentation, and training in business lending for credit unions. On Dec. 31, 2005, it booked its first loan, a $42,000 loan through $79 million Electro Savings Credit Union to a local landscaping company to purchase a dump truck. So far, West Community CU has closed a $1 million loan, has another $1 million loan in the pipeline and the “potential” for a $500,000 loan, said Hinrichs, who also serves as chairman of Heartland. The CU’s business development officer has helped secure those loans by hitting the pavement and building relationships. “This is a new venture for us. We’re learning as we go,” Hinrichs said. Since booking its first loan nearly three months ago, Heartland has gone full speed ahead with extensive training sessions with 12 of its 18 CU owners, said Jack Pollihan president/CEO. The training appears to be paying off as the CUSO has already amassed six loans totaling $2 million. Getting everyone up to speed has been the most critical part of the CUSO’s infancy, Pollihan said. “We’re training different people at different credit unions with different bases of knowledge,” he explained. “It’s an ongoing process. Some feel comfortable with it and others need some extra help.” That’s why the next year will be devoted to even more training, including ways to market business lending to members and how to identify a good deal versus one that doesn’t have potential, Pollihan said. Heartland will also assist the 18 CUs in becoming SBA-approved lenders, a move West Community CU is hoping will woo more businesses. “My goal would be not to tell someone `no,’” Hinrichs said. “We want to try to make the loan happen.” West Community CU has had its community charter since 1936 and over that 70-year period, has worked with more than 500 businesses, Hinrichs said. That’s everyone from a Mary Kay salesperson to businesses that have more than $2 million in annual sales. The next level is moving towards more “complex” deals. The CU will still continue to search out “more sophisticated approaches” for loans under $50,000, which are not really considered business loans by NCUA standards, and that are “worthy of being underwritten.” The CU will also continue looking at smaller requests between $10,000 and $15,000 as signature loans or lines of credit. Pollihan said one of the biggest differences he’s noticed between banks and credit unions is the latter’s willingness to work with each other and share ideas. Prior to coming to Heartland, he served as vice president of commercial lending for the Bank of Edwardsville, where he developed and managed a commercial loan portfolio of $22 million. “Banks are moving away from small businesses (due to acquisitions by larger banks of community banks),” Pollihan said. “Community banks used to have a familiar relationship with their customers, but now that they’re being bought, it creates an opportunity for credit unions to fill.” -

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