New, Local Company Finds Niche in Lending to Iowa Businesses
August 25, 2005
Des Moines, Iowa - Iowa businesses frustrated with the lack of local service and responsiveness from their lenders are finding a new partner in Des Moines-based Community Business Lenders (CBL).
CBL was founded in February 2005 through a unique, for-profit partnership between the Iowa Credit Union League in Des Moines, Community Choice Credit Union in Johnston, and MEMBERS1st Community Credit Union in Marshalltown, in order to provide all Iowa credit unions with the resources and third-party support to offer member business loans. Business owners who are eligible for credit union membership benefit by having a local lending relationship where they receive timely responses, competitive rates and member-focused service. CBL has already partnered with several Iowa businesses that were not adequately served by other financial institutions.
Business Success Story
CBL recently funded a loan with Street Smarts, LLC in West Des Moines, a company that offers driver education and training to more than 10 high schools around the state. James C. Meinecke, owner of Street Smarts, was able to expand his fleet of cars for driver education classes with the loan he received from CBL.
“I went to Community Business Lenders to apply for a business loan for Street Smarts and was approved and funded within seven days,” James said. “The staff at CBL understood my situation and worked quickly to approve the loan so I could concentrate my efforts on training tomorrow's drivers."
Through their vision, "Building stronger communities – one business at a time," CBL strives to strengthen Iowa's businesses, credit unions and communities. CBL was created in response to market demand by both the business community and credit unions, says CEO Mark Kilian.
“We've found a high demand from individuals and businesses looking for a lending partner that embodies the credit union philosophy – a lender who cares more about the needs and long-term success of the member than they do about making huge profits,” Kilian says.
CBL offers business loan underwriting, documenting, closing and servicing, as well as facilitating loan participations for all Iowa credit unions. Loan types offered include Small Business Administration (SBA) loans, revolving lines of credit and term loans such as real estate.
SBA Says Access to Credit is a Concern for Small Businesses
A February 2004 SBA Office of Advocacy report voiced “real concern” regarding bank consolidation and the industry’s future ability to adequately serve the credit needs of small businesses. In order to provide necessary credit and support for small businesses, the SBA expanded its 7(a) loan program to encourage more credit union involvement.
Small business owners’ access to credit has declined in recent years as regional banks elect to pursue larger, more profitable loans. Typically, these regional banks underwrite small business transactions in another state. Credit unions, on the other hand, work locally to meet the needs of their members, regardless the size of the transaction.
CBL works with credit unions to properly structure deals that best suit the businesses’ needs. Already, CBL has received loan applications that range from $60,000 to several million dollars. Given credit unions' collaborative philosophy and their interest in loan participations, loans in these diverse amounts can all be fulfilled. CBL believes that even though credit unions are only a small amount of competition to commercial banks, their presence benefits consumers. Currently, Iowa banks control 99.58 percent of the business loan market, compared to Iowa credit unions that account for 0.42 percent.
"CBL and Iowa credit unions are partnering to help support the credit needs of small businesses," Kilian says. “I'm proud that CBL is contributing to the growth of the state’s economy and keeping the American dream of entrepreneurship alive through our support of the small business community."
Community Business Lenders (CBL) is a for-profit credit union service organization (CUSO) that offers member business lending through credit unions to Iowa businesses. CBL is owned by the Iowa Credit Union League of Des Moines, Community Choice Credit Union of Johnston, and MEMBERS1st Community Credit Union of Marshalltown. Credit unions are not-for-profit, financial cooperatives owned and operated by their members. For more information on CBL and Iowa credit unions, visit www.cblenders.com.
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