BECU Provides Small Business Services

CUNA Lending Council
November 29, 2004

BECU, based in Tukwila, Washington, recently launched its Small Business Services Department. With assets of $4.8 billion, BECU is the largest credit union in the state, with almost 400,000 members. In addition to providing a full spectrum of traditional business products and services, BECU also offers SBA loans. The following interview is with Arnie Gunderson, BECU’s director of small business services.

Q: Why did BECU decide to offer business products?

A: Our members have been asking for these products and services for at least eight or nine years. We have survey data that spans this time frame where our members have expressed an interest in wanting small business products and services.

In September of 2003 we did an exit survey from our on-line banking system. Of approximately 2400 members who participated, 800 or so said they were in decision-making role at small businesses.

Q: When did you start the launch?

A: We offered the services as a pilot program at several of our Express Service Centers in March of this year. To ensure that our processes and procedures were working smoothly, we chose to do a soft launch, with no advertising to members or the public. When we were comfortable with the results of the pilot program, we proceeded to roll out the products and services to all of our member contact locations.

Q: Any advice for other CUs who are thinking about doing the same thing?

A: First, it is critical that you have staff that has the proper experience with business accounts. You want to make sure you find staff that is experienced in both the deposit and lending aspects of small business services.

Second, make sure your core processing system has the functionality to process both business deposits and loans. In many cases, business deposit accounts are more complex than consumer accounts and business loans are often unique to the transaction.

Of course, a solid business plan is critical. Most credit unions are in uncharted territory when it comes to offering business services. For ourselves, no other credit union with our demographics had implemented small business services; thus we had no historical data to draw on to help determine our projections.

So far we are meeting our forecasts. From March through October our Small Business Services Department has generated $4 million in loans and $10 million in deposits. Our typical business-services member is a sole proprietor with credit needs that are under $100,000.

Q: Any final words of advice?

A: Get your business-services staff hired as early in the process as possible. There is always a learning curve to a new system—that’s one problem with bringing people in from the outside. Also if these people are coming from banks rather than credit unions, it will take them some time to adjust to the culture of a credit union, where members really do come first.