Small Businesses Find Success with Credit Union Backing


Small Businesses Find Success With Credit Union Backing  by Darla Dernovse. This article originally appeared in Home and Family Finance.

Even in a crowded marketplace, a thriving small business can find its niche. Consider these diverse examples of small-business success:

  • A retailer serves swimmers and triathletes in stores and online.
  • A boarding kennel appeals to dogs and their owners with cage-free facilities.
  • A “wrecker” offers demolition services for construction contractors.
  • A daycare nurtures children with a focus on early learning.

The owners of these businesses share a smart business practice: They all turned their dreams into reality with the help of credit union member business loans.

Funding dreams

Keith and Debbie Haden, owners of All American Swim Supply, Florence, Ala., understand the importance of funding dreams.

That’s why All American sponsors swimmer Bryan Lundquist, a five-time All-American who holds the U.S. record for the 50-meter butterfly and was a serious contender in the 2012 U.S. Olympic trials.

Keith can relate to Lundquist and other competitors because he attended college on a swimming scholarship. Now he relishes the opportunity to continue working with the sport he loves by supplying swimming and aquatic-related merchandise at five stores and an e-commerce site.

“It’s a business that’s very well suited to what I know best,” Keith says. “It’s easy to be successful in the business when you have a passion for it.”

Despite Keith’s expertise, five banks turned down his applications for start-up loans before Listerhill Credit Union , Muscle Shoals, Ala., provided a loan to launch the business in March 2006.

“They made it happen for us,” Debbie says. The company continues to rely on Listerhill for checking, loans, and other services.

All American Swim Supply now has approximately 40 employees and has made Inc. Magazine’s “Inc. 5000” list of the country’s fastest-growing businesses since 2009. The Hadens credit their success to a commitment to customer service provided by great employees who are their second family.

“Despite a down economy, our business has thrived and grown,” Keith says. “It can be done.”

Creating a franchise

K-9 Resorts, Fanwood, N.J., tries to make the customer experience the best it can be for both its four-legged customers and their two-legged owners.

Jason Parker, president and co-founder, says special measures taken to satisfy its cage-free boarding and doggy daycare customers include:

  • Installing floors made of materials that kill bacteria and odors
  • Using hospital-grade disinfectant to clean facilities
  • Recycling the air every two to three minutes

Launched in 2005, K-9 Resorts has grown 15% in each of the past three years. The company began selling franchise licenses for new K-9 Resort locations to other aspiring business operators in 2011 and named Financial Resources Federal Credit Union, Bridgewater, N.J., as a preferred franchise lender.

“Even through the recession our numbers have continued to grow,” Jason says. “So far we’ve sold three franchises, with the first one scheduled to open in late 2012 in Middletown, N.J.”

Jason says offering franchising opportunities allows other business owners to share in K-9’s success, including the ability to establish a relationship with a credit union lender.

Increasing opportunities

Bob Becker, president of Becker Contracting Inc., St. Louis, believes in creating long-term relationships with the general contractors who use demolition services from his 28-year-old company, also known as “Becker the Wrecker.”

Funding was difficult to find—15 banks said no to applications for loans to buy a building and launch the program.

“We’ve never gotten bad feedback,” Becker says. “It’s about how we go about taking care of things. If something goes wrong, I assume its 100% our responsibility and work our way back from there.”

Becker has a second business that buys homes to remodel and then resell. He discovered he could reduce his interest rate on real estate purchases by more than three percentage points when he went to West Community Credit Union, O’Fallon, Mo. He first borrowed money there 36 years earlier to buy his wife’s wedding ring. A positive reception by business lenders at West Community prompted Becker to move all his business and personal accounts there.

“The people who manage and make the decisions at credit unions understand the local community,” Becker says. “They’re helping keep small businesses alive.”

Becker’s businesses had a rough year in 2008, when the recession drained demand for demolition and a flood swamped his office, destroying trucks, tools, and computers. He credits the credit union with providing the stability required to steadily rebuild the businesses as the economy began to rebound.

“My opportunities are increasing,” Becker says. “It’s not by leaps and bounds, but it’s significant.”

 A family focus

The Frescas family grew up understanding the value of providing exceptional care for children. The mother, Graciela, had a long waiting list among parents who wanted their children to experience her in-home daycare in El Paso, Texas.

When father, Jose, was disabled by a work-related injury, the family decided to launch Grammies Daycare & Learning Center—named for Graciela—to offer care to more children.

The proposal for a commercial daycare center was designed to take advantage of the skills of the next generation of Frescas caregivers: Nick, Divina, and Tobias, who among them had degrees in early childhood development, education, and psychology.

“The people who manage and make the decisions at credit unions understand the local community.”

“We had experience in daycare, we had backgrounds in education, our mom had developed the reputation, and we put our heads together and developed the commercial center,” says Nick, who now is director of operations.

But funding was difficult to find, with 15 banks saying no to loan applications to buy a building and launch the program. The Small Business Administration suggested the Frescas family contact a credit union for a loan, making it possible for the family to open its first Grammies Daycare in November 2005 and a second facility in March 2008.

Grammies’ relies on Security Service Federal Credit Union and GECU, both in El Paso, for business loans and financial services.

Nick notes that Grammies Daycare emphasizes learning throughout its curriculum, which includes a prekindergarten program that follows the Texas Education Agency (TEA) standards for kindergarten classrooms. Grammies also offers a Spanish-language enrichment program.

“That added layer of education is the most important thing we offer,” Nick says.

 Sharing the news

All four business owners have recommended their credit unions to other businesses.

Bob Becker recently rescued a friend’s small business—placed in limbo when a bank arbitrarily canceled its lending and deposit services without notice—by referring his friend to West Community Credit Union.

“I want a relationship with a financial institution where they know me and, if I need them, they are willing to go that extra step because of who I am,” Bob says.

To find a local credit union that you are eligible to join, and help you with a small business opportunity click here or go to the “Find a Credit Union” tab.

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