By Lisa Hochgraf
Credit unions say yes to Michigan business!
What a great message for credit unions to put out to the public in a state where the economy has been severely challenged--and where the government is calling for support for local business initiatives.
Ann Arbor-based Michigan Business Connection, a credit union service organization supporting member business lending, is working on an initiative that will give credit unions the great PR that comes from supporting local businesses and, in turn, strengthening Michigan's economy. (I daresay that echoing the governor's call to help businesses can only strengthen CUs' advocacy work in the state as well.)
Here's an example of the kind of headline CUs participating in the initiative can generate: "Credit Union Helps New Culver's Opening." That's the title on this latest news story on the Michigan CU Capital website. Here's an excerpt:
Tom Johnson was stuck. Five weeks before he was to close on his loan to open a Culver’s restaurant in Madison Heights, executives at the headquarters of a big national bank--which had just swallowed another national bank he was originally doing business with--announced that it would stop granting restaurants loans.
Johnson said the bank pointed him to several other possible lenders for the business loan. Then Linda Williams with the Madison Heights Economic Development Division suggested he contact Michigan Schools and Government Credit Union, which has a branch in Madison Heights. Michigan Schools and Government CU liked Johnson’s business plan and liked that he was local.
Working with Michigan Schools and Government CU and Chad Hoffmeyer at Michigan Business Connection [see below], Johnson was able to get his business loan back on track. Michigan Schools and Government CU is the lead lender, but other credit unions have a piece of the loan, which spreads the risk among several institutions.
Originally founded by large credit unions (Michigan Schools and Government CU has $1 billion in assets), Michigan Business Connection plans to do a public launch of Michigan CU Capital this summer. Michigan CU Capital aims to be a turnkey business lending solution that can serve CUs of all sizes. Here's the "Get started" page.
Getting into business lending could be a good thing for credit unions outside of Michigan, too. An article in today's Wall Street Journal, "Smaller Businesses Seeking Loans Come up Empty," cites findings from a Pepperdine University study that business owners rank access to capital as the most important issue facing privately owned companies today. In the past six months, only 17 percent of loan-seeking businesses with less than $5 million in annual revenue landed bank financing, the study found.
Sounds like an opportunity for consumer loan starved credit unions that can harness the necessary expertise. Anyone taking it on?
Lisa Hochgraf is a CUES editor.
Learn about the CUES School of Business Lending.
