Small biz, credit unions share interests

STITCHED TOGETHER: Ocean State Embroidery Inc. co-owner Robin Moorehead, third from left, was able to purchase new equipment for her business with the help of a Navigant Credit Union loan. She's pictured above, from left, with Joseph Morel, Debbie Lowell and Mary Ellen. / PBN PHOTO/?RUPERT ?WHITELEY
STITCHED TOGETHER: Ocean State Embroidery Inc. co-owner Robin Moorehead, third from left, was able to purchase new equipment for her business with the help of a Navigant Credit Union loan. She's pictured above, from left, with Joseph Morel, Debbie Lowell and Mary Ellen. / PBN PHOTO/?RUPERT ?WHITELEY

Robin Moorehead and her husband, Gary, in 2002 packed up their embroidery business, put it in a trailer behind their recreation vehicle and hit the road to follow the fans of an unusual circuit: the American Kennel Club dog shows.

The Mooreheads, who can now be found doing business at different shows around the country, customize stitching for dogs’ and handlers’ apparel.

Robin, the embroiderer, and Gary – dealing with the front office and customer service at their company, Ocean State Embroidery Inc. – have had the same three commercial embroidery machines since they started in 1997. Robin, who said the equipment was getting too old, decided to apply for a loan to buy a few new machines she’d found on sale.

She first brought her loan application to lending specialists at larger regional banks, but after having her loan application denied two different places, she felt her window of opportunity shutting quickly, until she met a Navigant Credit Union lending specialist who – after hearing her idea – offered to look at her application.

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Navigant turned it around and approved it just in time for her to buy the discounted machinery, she said.

“I was all excited and felt like I’d won the lottery,” Moorehead said.

The Mooreheads’ borrowing story today echoes credit union lending stories throughout their 100 years of service in Rhode Island.

“Our commercial lending isn’t multimillion dollar customers, it’s the mom-and-pop customers,” said Timothy J. Draper, Navigant vice president of marketing. “Our model hasn’t changed dramatically in 100 years.”

In 1915, French-Canadian mill workers gathered in the basement of Notre Dame Parish in Central Falls to form a community financial institution.

The Canadian immigrants moved south from Montreal to work in Rhode Island’s industrial market and – after making a little money and running into trouble becoming members of Rhode Island banks – a group of about 200 members created La Credit Union de Notre Dame de Central Falls. In their first filing they reported about $22,000 in assets, according to credit union records.

Today, 100 years later this month, La Credit Union de Notre Dame de Central Falls is a $1.5 billion financial institution headquartered in Smithfield known as Navigant Credit Union, which has more than a dozen locations and has the second most total assets out of all Rhode Island credit unions, second only to Pawtucket Credit Union, according to Providence Business News research.

Overall, about 33 percent of Rhode Island consumers are credit union members, according to Paul Gentile, president of Cooperative Credit Union Association.

Navigant President and CEO Gary E. Furtado says his team has seen a shift in the small-business lending market since the 2008 financial crisis and the subsequent years when customers became wary of subprime lending at bigger financial institutions.

“I’m not bashing the national banks, there is a need for them, but there is also a need for community members, and our business lending has been sky-rocketing,” Furtado said.

As of Jan. 31, Navigant ranked No. 5 out of 22 financial institutions, with seven U.S. Small Business Administration-backed loans given since October. It had just three in the same period last year, according to the SBA’s Rhode Island district office.

Credit unions have traditionally been thought of as institutions for mortgages, auto financing and home-improvement loans, but in 2010 they began lobbying Congress to ease federal regulations that limit their business spending.

Since 2011, the outstanding balance of SBA-backed loans via credit unions increased nearly 50 percent, from $810 million to $1.2 billion, according to SBA Administrator Maria Contreras-Sweet, who last month announced a new partnership with the National Credit Union Administration to expand accessibility to SBA loans from credit unions, which don’t count against their business loan cap.

Gregory Gould, lender relations specialist for SBA Rhode Island, said business owners or entrepreneurs have a difference of opinion when it comes to what type of financial institution they want to do business with, but he has seen an increase in the amount of customers looking to be treated “like a person and not a number.”

Gould’s observation reflects a sentiment expressed by Moorehead.

“The big banks didn’t want to hear my stories,” Moorehead said. “[Navigant] made me feel like I was important.”

But as the economy strengthens and bigger banks’ financial statements become more balanced with growing profits, it’s likely a greater focus will be put back into the small-business lending market.

“I think that for a long time the larger commercial banks weren’t lending money to small businesses. They weren’t going to make enough back on their investment to play in that sandbox, which left a wide-open market for smaller community [institutions] like ours,” Draper said. •

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