Member business lending is a solid part of many credit unions’ loan portfolios. But business relationships shouldn’t just stop once the loan has been approved. Small business owners carry influence in town, and credit unions should work to be considered as the primary financial institution of area small businesses.
Paul Muse, VP of retail at 1st Advantage Federal Credit Union ($538.8M, Newport News, VA), used a targeted strategy to entice small business owners.
The first step was defining a small business; Muse defined a small business as startups and those with $4-$5 million in annual sales.
Once the credit union defined its target, it deployed sales and support process and internal goals to make cultivating stronger relationships with small businesses a reality.
Muse said that these relationships helps 1st Advantage serve the community by supporting the creation of local jobs. Business members are also four times more profitable than individual member relationships. Small business members also tend to refer more people.
The plan generated results, too. The credit union saw 26% year-over-year growth in business lending.