SAULT STE. MARIE—Small business owners, particularly those in remote rural and Northern communities, have struggled with the process of accessing loans to build and grow their businesses for years. That process has just become a lot more accessible thanks to the launch of an online account opening tool that will offer small businesses accounts with affordable, unsecured lines of credit up to $250,000. It is Canada’s first financial institution to offer business accounts with a line of credit online and the service is available to Ontario-based companies.
Northern Credit Union, which merged with the former Espanola and District Credit Union on January 1, said in a press release that it “did not set out to make history, but to provide an easy way to give small business owners quick access to capital when they need it.”
Tony Dunham, Northern’s senior vice president, explained, “we know the huge role small business plays in the Northern economy, that’s why we’ve invested in thousands of businesses from Thunder Bay to the Ottawa Valley. These businesses have gone on to create more jobs and growth for our Northern communities–proof that good things happen when you keep your dollars close to home.”
Mr. Dunham, whose official title is the hefty senior vice-president sales, marketing and channel management, spoke to The Expositor about the new services, how they came about and what that means for Island small businesses and entrepreneurs.
“We did a great deal of research with small business owners over the past couple of years,” said Mr. Dunham. “A lot of small business owners told us that ‘nobody wants to lend us money’.”
The difficulty that small business owners were running into is that it takes the same amount of work to provide a small loan to a small business as it does to provide a million dollar-plus loan to a large corporation. So the large lending institutions tended to concentrate on the loans that provided a better cost-benefit to themselves.
That provided a niche that Northern is well positioned to service.
Northern Credit Union has 3,000 business members located in Ontario Northern communities stretching from Thunder Bay to the Ottawa Valley, serving them through 31 branches. The new online business banking platform launched by Northern allows members to open accounts and secure lines of credit in a matter of minutes.
“You don’t have to go into a bricks and mortar operation,” noted Mr. Dunham. Although “you can if you want to, this advanced digital service will not sacrifice Northern’s personal approach to banking. It’s another great tool and a unique one as we are the first to offer our members the ability to apply for a business line of credit of up to $250,000 all online.”
Northern’s research has shown that few people want to travel 30 to 40 minutes to do their banking, and possibly due to the geographically dispersed nature of Northern and rural Ontario, the community has developed a “strong affinity to technology.”
Just because the entire application and granting process takes place online does not mean that security is not in place. You can’t just go online and make an application in someone else’s name and walk away with a $250,000 payday.
“We have all the same precautions in place,” noted Mr. Dunham. “There are certain documents that must be uploaded and we can cross-check them to make sure you are who you say you are.”
The turnaround times are nothing short of awesome. “Our goal, if all of the documentation has been uploaded, is to make a decision within minutes,” said Mr. Dunham. “We aim for at least a 24-hour turnaround, at the latest.” From there, if approved, it is usually about 72 hours until the funding flows.
The program is already proving to be a resounding success. In the first two days there had been 61 applications pending, a number of which had been approved.
Northern Credit Union’s range of products and services for small business include operating lines of credit up to $250,000, no annual reviews, 100 percent unsecured with a personal guarantee, affordable rates and a global payment card for funds access.
Northern Credit Union is regulated by the Financial Services Commission of Ontario (FSCO) and is covered by the Deposit Insurance Corporation of Ontario (DICO).
The new digital services can be accessed through the Northern Credit Union website at northerncu.com.
