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CU System
IKansas City Business JournalI CUs help small biz
KANSAS CITY (1/11/11)--Credit unions are increasingly finding ways to provide loans to small businesses as they diversify their service portfolios for members, according to an article this week in the Kansas City Business Journal. “It’s a market we want to develop,” Dennis Pierce, CEO of $1.75 billion-asset Community America CU in Lenexa, Kan., told the Journal. “We go at it as an extension of our members’ personal business, and we tend to continue to focus that way.” Although the credit union doesn’t aggressively try to market products to local businesses, commercial loans are becoming more important because members are struggling to keep their small businesses thriving in a troubled economy, Pierce told the Journal. “If you look at national statistics, most of the job growth is going to happen with small businesses, so we want to be a part of that and support it,” Pierce added. Credit unions often provide loans that banks don’t because credit unions look at the character and individual circumstances of the applicants, Rob Givens, CEO of $410.6 million-asset Mazuma CU in Kansas City, told the Journal. “It varies case by case, but in general, I think the difference is the relationship we establish and the commitment we make to really understand their business,” Givens added. “We dig into it and try to find what is going on that inhibits them from getting a loan from a bank. Having a deeper level of understanding for what they are trying to do often gives us confidence to make a loan that a bank might not do.” From March 2009 to March 2010, credit union business lending rose 9%, while it decreased 9% at banks, according to Credit Union National Association (CUNA) data, the Journal said. CUNA and credit unions have advocated to Congress that their member business lending cap should be lifted to 27.5% of total assets from 12.25% to boost the economy with 100,000 jobs and $10 billion in loans to small businesses, at no expense to the taxpayer. To read the article, use the link.
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