FARMINGTON HILLS, Mich.–U.S. military veterans are a good bet on a small business loan, contends one credit union that plans introduce a formal affinity program to serve vets, which includes relaxed business lending standards for armed services entrepreneurs.
On Veterans Day later this year, the $735-million Community Choice Credit Union will roll out the program, which includes creating specially painted purple parking spaces at all branches for vets.
“We want to create a place where our military veterans, including those on active duty, can go to receive personal attention,” said Alan Bergstrom, SVP, CMO. “We also want to support entrepreneurship.”
Bergstrom outlined how there is a need for financial institutions in this state to provide an affinity program for veterans.
“We looked at the population in Michigan, and 700,000 are military veterans, but there are no financial institutions that specifically focus on the needs of veterans,” said Bergstrom. “Yes, there is Navy FCU, Pentagon FCU and USAA, but those relationships in this state will primarily be virtual, long distance. Veterans need to walk into their community financial institution, sit down and talk to someone face to face and have a personal relationship.”
Local Need
Bergstrom added that veterans need a local financial institution that is not just thinking about them and thanking them for their service, but has created a portfolio of products to meet their needs and the needs of their families.
Community Choice is currently developing specialized deposit products and possibly a checking account for the program. But Bergstrom emphasized that lending will play a key role. CCCU is creating a small business lending program for veterans who are seeking to start a new business.
Bergstrom said the program will relax lending standards and make some exceptions to policy, looking for more ways to grant a veteran a business loan, even if the entrepreneur does not have two years of financial information.
“A good number of servicemen, once they come off of active duty, explore starting their own business,” said Bergstrom. “Unfortunately there are very few financial institutions that want to talk to them, and I am speaking mostly of banks. Most banks want two years of financial information for the business before they will even consider lending money to a startup.”
The Small Business Administration, Bergstrom explained, just completed a study and learned that among those starting a new business, military veterans tend to be the most successful.
Bergstrom said the SBA attributed that success to ex-military being focused, disciplined, reliable and hard-working.
“They have a certain sense of mission, a dedication to accomplishing a goal,” said Bergstrom. “They have a passion for something when they are committed to it, and don’t give up easy if things go sideways. They stick with it.”
Connecting Vets With Support Programs
In addition to specialized CU services, Community Choice is reaching out to government and non-profit organizations that support veterans to assemble a database of programs veterans can utilize.
“We are creating partnerships with organizations so when we speak with veterans we can have this information at our fingertips, and veterans can take advantage of this support that maybe did not know about,” said Bergstrom.
While Community Choice is launching the affinity program primarily to help the military, Bergstrom expects the credit union will benefit as well from additional loans, deposits and from stronger ties with veterans and the community.
“This is a program we are passionate about,” said Bergstrom, who served as an Air Force intelligence officer during Ronald Reagan’s years as the country’s leader, serving as the former president’s briefer for 12 months. “This is a program that is needed. We want to be that local presence that the military can talk to—not by phone or by email. This is a face-to-face relationship, and about real people helping real people.”