Business Lending Boosts Member Relationships

Credit Union Magazine
September 3, 2009 | COMMENTS

Fostering close relationships with business members encourages them to do more business with the credit union—on the consumer side, too.

“A few years ago, one of our larger business credit relationships was running into financial difficulty,” explains Mark Joyce, executive director of business services for $600 million asset Texas Trust Credit Union, Mansfield, and executive director of its credit union service organization, Texas Advantage Commercial Lenders. “Our staff met with the owners several times to listen and get a clear understanding of the issues.

“Both of us wanted to find a win-win solution, which was a complete restructure of the credit that allowed them to recover sales growth and profitability, and provide working capital,” he continues. “Now they're a sound credit on our books and the depository relationship is in excess of seven figures. We're their sole source for financial products and services and we have the principles' personal relationships as well. By remaining open to all ideas and thinking creatively we accomplished that.”

Twin Star Credit Union, Olympia, Wash., has had similar experiences, notes Jeff Kennedy, senior vice president and chief operating officer for the $739 million asset institution.

“About seven months ago we did a Small Business Administration loan for a startup business, a retail wine shop,” he explains. “They'd worked with experts to put together a really nice business plan and they're doing very well.

“They're a bit out of our service area, about 40 miles from the closest branch, so they do all their merchant deposits at shared branches,” Kennedy continues. “Because we helped them, we're getting a lot of their personal accounts and their payroll. And they spread the word about our credit union.”

The best way to maintain strong relationships with business members is to stay in frequent contact with them, Joyce and Kennedy advise.

“That's the absolute key,” Joyce says. “They love to talk about their businesses. All you have to do is listen and they'll give you clues about how they're really doing, and you'll get ideas for other products and services they might need. You'll also be giving them attention that other lenders don't take the time to give.”

TwinStar has two units that work with business owners, Kennedy explains. “Our business relationship officers handle lending and deposit products and our business development officers talk to members about insurance, 401(k), payroll, and automated clearinghouse services. We also talk about the benefits of credit union membership and suggest they encourage employees to become members.

“We have people who can drill down and help business members with their cash flow and help them use our services to make more money,” he continues. “The more attentive you are to business members—just as with consumers—the more likely they'll be to stay with you and the more products and services they'll use. You'll also better understand how their businesses are doing and spot warning signs.”

This article originally appeared on creditunionmagazine.com. Reprinted with permission.