In light of the challenging economic climate, many small business owners are reevaluating which financial institutions are best suited to them and, in some instances, traditional banks don’t have quite the appeal they used to.
“Most people are still unaware that credit unions are even able to offer business products, so a lot of the increase has been due to education and our marketing efforts,” says Vincent Neal, business development officer at KEMBA. “Another major reason is that we have never stopped lending money. We are able to offer small business loans all the way up to $7 million, so that provides a lot of incentive for a small business owner to consider KEMBA as their banking partner.”
Fortunately for Telhio, the credit union launched its business program a few years ago and because of its status (as a credit union), when the credit crunch hit, Telhio had money to lend− and could do so when others couldn’t.
“We began to grow and, because of our outstanding staff of seasoned experts with many years of experience in assisting small businesses thrive, we’ve just continued with that trend,” says Robert Myles, senior vice president of lending/asset protection at Telhio. “Our members are very loyal, and we do not take that loyalty or our responsibility to them for granted.”
Telhio provides a range of small business services, from checking and savings accounts to loans and investment services.
“We can help business owners with everything from online bill pay or equipment leasing to setting up a retirement plan for employees or developing buy/sell agreements for business partners,” Myles says.
KEMBA offers business members a Business Value Checking account that is ideal for someone just starting out or a Business Smart Checking account, that pays interest on your balance, for those who are more established, Neal says. Additionally, it offers the KEMBA Business Premier Visa that pays cash back rewards and other incentives.
Columbus-based CME Federal Credit Union also offers products and services tailored to small businesses, including checking accounts, savings accounts, money market accounts, and share certificates.
“We also offer business loan solutions, including real estate, short and long-term lines of credit, and credit cards,” says Jacquie Ayres, vice president of marketing at CME.
Though Myles and Ayres touted their credit unions’ focus on service, they claim the biggest difference between banks and credit unions is that the latter are not-for-profit financial cooperatives, which means all their profits and earnings are shared with every member.
“This allows us to pay higher interest rates on our savings accounts and charge lower interest rates on our loans,” Neal says. Further, a credit union will have fewer fees than a typical bank while providing many free services, like financial counseling and advice.
All three credit unions also connect business members with outside resources that can help get their companies off the ground or advance them.
“We work with third party vendors to assist CME with credit card processing and commercial loan management,” Ayres says. “Both products are critical for small businesses, particularly during startup.”
Telhio works closely with the Small Business Administration to offer government-backed loan programs, such as loans for land, buildings, expansion, renovations, machinery, equipment and inventory, Myles says. In addition, Telhio works with the state of Ohio and the city of Columbus to provide loans for businesses and provide access to other programs that help small businesses become a reality and then grow.
Telhio also participates in a program that is co-funded with the Certified Development Company, a non-profit corporation that helps stimulate economic development in our local community, he continues. Plus, through its merchant services program, Telhio helps each business owner identify their business transaction needs and work with the credit union’s partners to create a customized product that meets those needs.
“KEMBA has a dedicated Business Development Department, which helps small businesses meet all of their needs,” Neal says. “We have third-party partners, like Newtek, who can offer merchant services to Web design and everything in between. Another part of our job is to build an extensive network of professionals, which we can then put in touch or make recommendations for any of our business members. Having these relationships in place allows us to think outside-the-box about how our members could launch or improve their business.”
Small business owners pondering credit union membership should take several things into consideration.
“You should definitely look at the history, stability, and security of the credit union,” Myles says.
He also advises reviewing its technological capacity and asking whether its services are evolving to keep up with members’ needs.
“Our focus groups have indicated that finding a credit union that will take the time to learn about their business and understand their needs is extremely important,” Neal says. “We want to take that relationship to the next level and learn about their goals and where they want to go. It’s about finding a credit union who gets to know you as a person and not just another account number.”