Small business thinks highly of credit unions
“A complete coincidence!” chuckles Dan Kelly.
The president of the Canadian Federation of Independent Business doesn’t think he’d ever heard of national Credit Union Day until after the CFIB brought out a report praising the way credit unions deal with its members.
“Our timing was chosen because it was Small Business Week.”
Nicknamed “The Battle of the Banks”, the survey asked 11,000 small business owners to rank financial institutions on four things: Financing, fees, account manager experience and service.
And the CFIB says credit unions were tops in all categories.
“The main reason for that is local decision-making,” said Kelly. “Fact is, many business owners worry that, with some of the big banks, they’re basically a number, that their assets and liabilities are plugged into a spreadsheet — and it kicks out an answer as to whether it’s a go or a no go for a loan.”
With credit unions, there’s a feeling that managers “actually get to know” them and their businesses, he said.
“We’re very proud of our ability and I think it’s rooted in the ‘localness’ of credit unions,” said Eric Dillon, CEO of Regina-based Conexus Credit Union. He said about 50 per cent of Saskatchewan small businesses now get their financing from credit unions.
And one outcome of mergers and growing sophistication among credit unions is that they’re able to handle ever-larger business loans. “If you’d look at the business landscape in Regina, you’d probably be shocked to learn how many of those are financed by your local credit union,” Dillon said.
Nationally, credit unions got a score of 7.2 out of a possible maximum of 10, while ATB Finance, the Alberta government-owned “near bank” that operates only in the Wild Rose Province, leaped to second place from 10th in the 2013 survey. Scotiabank came in third.
National Bank, went from 7th place to 4th, and CIBC moved from 8th to 4th. Next came the Royal Bank, Bank of Montreal, TD Canada Trust, the Desjardins financial group and HSBC at 3.0.
Credit unions posted even higher marks — 8.4 of 10 — from survey respondents in the CFIB’s Prairie region, which covers Manitoba and Saskatchewan. Behind them were Scotiabank, TD Canada Trust, Bank of Montreal, Royal Bank and CIBC.
So what would the also-rans have to do to please small business?
Simple, says Kelly: “Commit to playing in the small business space.”
He said many small and medium-sized business owners feel they’ve been reduced to assets and liabilities on the spreadsheets in Toronto-based “big banks,” some of which seem to be losing interest in small customers.
Credit unions traditionally have focused well on individual consumers’ needs, but “what surprised me about this report is that credit unions were rated at the top by our micro, small and mediumsized members,” said Kelly, adding: “That’s pretty cool.”
Banks that want to improve their ranking should also:
Improve the account manager experience.
And don’t throw all their eggs into the Internet loan basket because this withers the loan manger-client relationship even more. Yeah, the speed is good, but rates can be high and it “takes away from the personal relationship.” and the combined category of condiments and spices.
In another important economic indicator, sales at Saskatchewan retail establishments were “effectively flat for the past 12 months,” Elliott said.
August sales were $1.64 billion, an increase of only 0.3 per cent from August 2015. “Adjusted for inflation, this will mean that the volume of sales will have declined by more than two per cent compared with a year ago,” he wrote.
But sales were unevenly spread. Elliott said pharmacies and home centres had a good month with year-over-year increases of 14.0 per cent and 9.7 per cent respectively.
These increases were offset by declines of 4.0 per cent among new motor vehicle dealers, 3.6 per cent among grocery stores, and 1.2 per cent among general merchandise (department) stores.
Commented Elliott: “These figures continue the pattern we have seen in the last 18 months with consumers using their savings at the gas pumps to curtail overall spending rather than redirecting it to other kinds of stores.”