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Small business banking: The credit union solution

Small businesses, many of which face high costs and inaccessible service from other financial institutions, need the type of member-focused flexible services that credit unions specialize in offering.

Small businesses are extremely dependent on branches and they demand flexible and extended hours of operation as well as higher levels of responsiveness and support from branch staff. These are areas in which credit unions excel.

At large, impersonal financial institutions, long-distance decisions are often the norm. On the other hand, local financial institutions can be more responsive, but often can't offer a full range of business services. North Island Credit Union is working to bridge that gap.

With its branches in North County, "The Island" provides the types of full-service support small businesses say they need. Those include payroll services, insurance products, employee benefits and retirement plans.

North Island Credit Union offers four types of business checking accounts, business savings accounts, a full range of loans and lines of credit and commercial property loans. With 65 years doing business in San Diego, The Island's decision-makers -- all long-time area residents -- have first-hand knowledge of the local economy.

As a member-owned financial institution, North Island Credit Union works as a cooperative to bring product and service advantages to its member businesses. There are no outside stockholder interests to take priority and no financial motivation to be bought or merged.

This translates to stability for those who choose the credit union for their business banking relationship.

In 2002, North Island Credit Union marked a milestone by becoming the first credit union in San Diego County to enter the Small Business Association (SBA) 504 loan market through a cooperative effort with CDC Small Business Finance Corp.

In 2003, it marked another milestone by becoming the first credit union to fund SBA 504 loans in two counties - San Diego and Orange. Last year, the credit union topped $350 million in member business loan funding and had grown a member business deposit portfolio of $60 million.

At the end of 2004, 195 CUs were offering 7(a) loans, which is a 60 percent increase over 2003. The SBA is encouraging more credit unions to offer SBA loans.

Many credit union members appreciate that one of SBA's goals is to make more small loans to entrepreneurs. Indeed, in the 7(a) loan program, the SBA did 24,000 loans under $35,000 in 2004.

But offering the right services to small member businesses is only part of the solution. In order to become the first choice for small businesses, credit unions must also offer accessibility and responsiveness. North Island Credit Union excels in these capacities.

North Island Credit Union has established an infrastructure to make business banking as easy and accessible as possible. Business facilities including merchant windows and drop boxes, and extended hours are available.

Members have free, comprehensive and secure Internet access to accounts 24 hours a day for statements, downloads and check images, as well as phone banking benefits. In addition, The Island's ATMs are fee free.

Visit www.myisland.com for more information.

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