SAGINAW – For Alice Brown, a terrifying head-on car crash that disabled her also opened the door to an innovative new business.
Not one to give up, Brown designed a knee brace that relieves pain, while helping rehabilitate injuries and restores normal movements. Then, Brown took her design a step further: She set her sights on selling her product online.
Though she had already overcome so much, Brown faced one more hurdle: Access to capital to get her business idea off the ground. That’s where Wildfire Credit Union came in, providing her with the small-business loan she needed to get started.
“I’m really grateful to Wildfire Credit Union for giving start-up businesses like mine a chance,” Alice Brown said. “I wanted to share my product with others in the hope that it could help make their lives a little better. Thanks to Wildfire’s support, I’ve been given the opportunity to bring my knee brace to people who need it while creating jobs and contributing to the local economy. Without the help and support from my credit union, I never would have been able to see my idea through.”
Today, thanks to the support of Wildfire Credit Union, Brown is successfully marketing her knee brace through her online company, In The Groove. In addition to helping her customers relieve pain and maximize their mobility, she has been able to hire four full-time and one part-time employee.
Wildfire Credit Union is not alone.
It’s part of a Michigan and nationwide trend: Credit unions are ramping up small business lending at a time when other financial institutions are stepping back. And federal legislation has been introduced that could increase credit unions’ small-business lending even more.
Michigan credit unions’ small-business loans surpassed $1 billion for the first time in early 2011 with member business loan growth of 29 percent for the 12-month period ending June 30, according to the National Credit Union Administration. During the same 12-month period, Michigan banks’ small business lending dropped 10.1 percent.
Nationwide, bank lending to small businesses fell by $15 billion nationally in the first quarter of this year, according to the U.S. Small Business Administration. [See linked story on CNN Money, “Small business lending plummets,” 6/16/2011]
“Credit unions are stepping up to lend as other institutions are stepping back,” said David Adams, CEO of the Michigan Credit Union League & Affiliates. “Small businesses continue to struggle with access to low-cost capital and credit unions are providing a good alternative for certain types of small business loans.”
Credit unions’ small-business lending could potentially grow even more with the right policies: The U.S. Senate Banking Committee is considering a plan to let credit unions lend up to 27.5 percent of its assets for small-business projects, up from the current cap of only 12.25 percent of total assets. Increasing the small-business lending cap could potentially pump $13 billion into the economy and create 140,000 new jobs in small businesses without any taxpayer costs, according to the Credit Union National Association.
“Our credit union is proud to have the opportunity to finance small business owners with big ideas like Alice Brown,” said Linda P. McGee, Wildfire vice president of membership development. “Local innovators provide the new ideas that drive economic growth and create new jobs. The more we can lend to small businesses, the more positive the impact on our local economy.”
Michigan’s credit unions have been making business loans since their inception in the 1930s, helping local small businesses launch and grow. Lending has grown from $345 million in 2005 to more than $1 billion today. In 2010, 33 credit unions pledged $43 million in loans to the Credit Union Small Business Financing Alliance, partnering with the Michigan Economic Development Corporation and the Michigan Small Business & Technology Development Council to help train entrepreneurs and fund new businesses in the state.
About Wildfire Credit Union
Wildfire Credit Union was founded in 1937, and adopted a community charter in 2004. Membership is open to anyone who lives, works, goes to school or worships in Saginaw, Midland, Bay, Genesee, Tuscola, Shiawassee and Gratiot counties. For more information, visit www.wildfirecu.org.
About the Michigan Credit Union League & Affiliates
Organized in 1934, the Michigan Credit Union League is a trade association representing 319 credit unions statewide. Based in Lansing, the MCUL offers credit unions assistance in the areas of regulatory compliance, legislative advocacy, media advocacy and operational information. For more information, visit www.mcul.org and follow us on Twitter at www.twitter.com/MICreditUnions.