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Many small business owners are currently facing a credit crunch when they try to obtain funds for startup or expansion projects. But, as is often the case, credit unions have continued to make loans to members – and businesses – even when others in the financial industry have pulled back. At the same time, credit unions that want to enter the business member arena often find that building a program in-house can be costly in terms of time and financial resources.
The better solution
Enter Member Business Solutions, LLC – a CUSO that has partnered with credit unions throughout the country. MBS supplies a turnkey package and industry expertise that allow credit unions to offer business lending and other services with ease and confidence. Since its launch in 2004, the Company has worked with some 70 credit unions and helped underwrite more than $2 billion in business loans. In fact, MBS recently accomplished a major milestone – processing its 5000th loan.
The loan recipient that put the Company over the top was MacHill Machinery Solutions, LLC, a business member of South Carolina Federal Credit Union in Charleston. Launched in 2009 with just two employees, MacHill Machinery imports computer numerical control (CNC) machines, and then adds robotics and custom-engineered tooling solutions. The firm currently employs five people and plans to add more.
“Most of our competitors are much larger,” said Robert McPherson, MacHill’s President. “Our goal is to grow and be competitive—and South Carolina Federal is a key component of our continued growth.”
The partnership for success
South Carolina Federal Credit Union has worked with MBS since 2006, and according to Steven Majewski, Business Services Officer, the relationship has been productive since the start.
“MBS provides the underwriting that has enabled us to grow our portfolio, and our loan officers have the personal knowledge and experience with business members,” he said. “Working together, we’ve been able to expand our portfolio with quality loans.”
The $1.3 billion SCFCU has 5,004 business members and business deposits of more than $28 million. At present, there are 276 business loans outstanding, with an average loan amount of $45,000. Majewski says the firm looks for businesses with fewer than 25 employees and annual sales of less than $2.5 million.
The complete package
MBS supplies the tools and operational expertise credit unions need to serve their business members successfully. By offering sample policies, staff training and underwriting services, MBS frees credit union staff to focus on the needs of its members and concentrate on growing the program. And, because credit analysis, underwriting, credit policy and back-office support are centralized with MBS, the associated costs are a fraction of those related to starting an in-house program.
It’s a prime example of a “win-win-win” situation. South Carolina Federal boosts its bottom line and makes its business members, like MacHill Machinery, very happy. Small businesses succeed and benefit their communities and, at Member Business Solutions, our growth gives us the financial strength to prosper and help other credit unions reach their goals, as well.