By Ray Birch
JACKSONVILLE, Fla.—One credit union that has grown business services members by a double-digit percentage each of the last 10 years says the secret to that success is simple.
“There are several things you need to do to run a successful business services and MBL program,” said Joseph Nowland, chief business services officer at Vystar Credit Union, which has more than 20,000 business members. “But what is most important, and the easiest to do, is to make sure the entire organization knows you offer business services.”
Nowland said that if a credit union is serious about building its program it should start at the “top of the house” and encourage collaboration and support for business services across the entire organization.
“That includes not only the branches, but electronic payments, deposit operations, facilities—every area,” he said.
On a quarterly basis in department meetings, the $7.2-billion Vystar, which recently won a CUNA Mutual Group Excellence in Lending Award for its business lending program, shares the message of the importance of helping business members.
“Several years back we started emphasizing a slogan inside the credit union—‘Did you know we offer business services?’” explained Nowland. “Any person in the credit union should be able to answer that question correctly. That is where it started with our enterprise-wide effort to support business services, and that is when we began to see massive movement in overall business services growth.”
Vystar has 1,400 employees.
“If only a small number of them know you offer business services, then how in the world do you let a population of millions know you have business services?” said Nowland. “For example, an employee in the mailroom who never has any reason to speak with a member about business services visits the dentist. He asks the dentist if he knows that Vystar has business services. The dentist, who has been a member for 20 years, says no. That’s where it starts.”
The credit union supports the entire team with basic business services training.
“We have built computer-based training that is fairly general,” explained Nowland. “It’s not targeted at people who sell. The goal is to make staff feel comfortable talking about business services.”
The credit union also takes a very flexible approach to its business services and procedures, constantly evaluating what it is doing and what it is offering to make sure the CU is meeting the changing needs of its business services clients.
“We don’t build policies and procedures so they become outdated. Every six months we go over our business lending and business services policies and procedures,” said Nowland. “We go over them line item by line item and ask is this right for our members today. If not, we retool. Sometimes the change is big, sometimes the change is small. But we do what is needed.”
Nowland said as a result of one recent review, Vystar lowered its minimum to open its secured business Visa card from $2,500 to $500.
“We determined that for us to truly help some of the small business members, especially those starting up or in the early growth stages, we needed to lower the minimum to open the card,” said Nowland. “Some of the bigger adjustments we have made to better serve members have been around approval ratios, looking at who we are declining and why, and do those reasons really make sense today.”
Nowland said Vystar years ago spotted a need to help startups gain access to small amounts of capital. The credit union launched its Micro Visa card to provide those businesses with a few-thousand dollars in credit.
“We realized we can’t help a startup with a $100,000 loan unless the Small Business Administration gets involved, and we know they need capital. So we introduced the Micro card,” explained Nowland.
The goal is to help business “graduate to the next level” and build relationships that allow the credit union to provide them with more services.
“That $2,000 they get from the Micro card helps them buy equipment,” said Nowland. “After a while, you have been making payments on time, we get to know you and your business, and maybe we graduate you to a larger Visa card, and then maybe equipment and vehicle loans. We want to help businesses get to that third year. You know the statistics—75% of all startups fail in their first year, and then another 50% of those remaining fail in the second year. We want to help business graduate through their lifecycle.”
No Closing Costs
Nowland said another product that helps businesses get started is its no closing cost program, which waives the closing costs on a real estate loan to help capital-strapped startups move away from leasing. The credit union has also lowered its vehicle and equipment loan rates to be competitive with consumer loan rates.
Nowland arrived at Vystar 10 years ago and he began tracking the credit union’s results.
“We have been growing new business members anywhere from 11%-12% in some years, to 17%-18% in others,” he said. “It’s always been a double-digit percentage—and I can’t stress enough the importance of the simple step of letting the entire staff know the credit union has business services. Can we keep this growth up? So far we have, but I admit it gets harder to keep the growth rate up as we grow. As I said, we have more than 20,000 business members.”