Credit Union Launches Site with Goal of Doubling MBLs

Ray Birch
May 26, 2010 | COMMENTS

To get ahead of banks' re-entry into small business lending, Michigan First Credit Union has launched a robust online business banking site to double its business lending portfolio by the end of the year.

Michigan First CEO Michael Poulos expects the website will attract more business services. "If you are doing business lending anymore, you have to have all the services to drive it," said Poulos.

Having a website dedicated solely to businesses sends that message, the CEO added. "This is not a credit union website with some business services accessible from it. It's separate from the consumer side of our website. It is visually appealing and very quickly those within the community know that we are here to serve their needs with all the business services they require."

Called Business+Community, the site offers direct deposit, ACH payments, domestic or international wire transfer, balance alerts, online funds transfer, resubmission of previously deposited checks as an ACH item, customizable access rights, free bill pay and e-statements, and customizable reports.

Poulos stressed that the opportunity is huge right now to build loyalty with businesses and establish relationships banks can't break. "Frankly, a lot of businesses did not look at banks' fees a great deal before the economy got tough. But now many realize that lower fees could make or break them. Our costs are lower than banks."

The biggest differences between MFCU's business services and banks' offerings are those price points and simplicity, Poulos said. "Banks charge for everything you do. Deposit a strap of bills and you're charged. Every check, you're charged, and so on. Then they give you earnings credits. We chose a much more streamlined approach."

Those who want basic services pay $20 a month for cash-management tools and get free bill pay. Companies that add ACH to process payroll pay a total of $50 a month. Business savings and checking accounts paid 1%, at press time.

The $530-million credit union, which has a $13-million commercial loan portfolio, charged 5.5% to 8% for business loans depending on the details of the loan and the company's credit. Poulos said he is not concerned about doubling business lending at a time when many entrepreneurs, pushed out of the workforce by corporations, are entering the business arena for the first time. "We are not doing anything more than 70% loan-to-value. We do an extensive business analysis to make sure cash flows are there, and we deal primarily with established businesses that have a track record of success."

By the end of 2010, Poulos projects Michigan First Credit Union will have 50 medium-to-large businesses using its online tools. Setting up the site, which is linked to the credit union's homepage, was turnkey. Developed and hosted by Postilion, out of Norcross, Georgia, Business+Community was less expensive than building the site internally and establishing and running all of the electronic businesses services in-house, the CEO explained. MFCU paid Postilion less than $50,000 to deploy online business banking, with minimal ongoing monthly charges.

This article appeared at www.cujournal.com and is reprinted with permission.