An eye on the little guys

Almost eight months ago, optometrist Dr. Robert Glass, owner of Costa Mesa Eye Styles for Lifestyles, was looking to refinance a series of business loans.

After borrowing from large banks and the Small Business Administration over the years, he was ready for something new. His interest rates were high and he wanted to restructure to get a better deal.

“I’ve worked with a lot of large banks over the years and they can be very restrictive in the way they do small business loans,” Glass said. “It’s all about formulas and if a business doesn’t fit their formula, they can’t do a reasonably good loan.”

Referred by a colleague, he sought out Business Loan Link, a co-op of credit unions that have banded together to “help out the little guy.”

The credit union service organization, or CUSO as it’s called, is made up of six Orange County and Los Angeles credit unions including Newport Beach-based Allied Health Care Federal Credit Union, where it makes its home. Lending was not traditionally linked to credit unions, but with the emergence of credit union service organizations, they’re now pooling their resources to be able to extend their assets to other small businesses.

Jill Casselman, president of Business Loan Link, hooked interested credit unions together to form the loan agency.

“The big banks sort of left the little guys by themselves,” Casselman said. “We’re handholding and really want to help from one small business to another.”

Business Loan Link started in Feb. 2005 and within the first seven months funded its first loan, Hayes said.

The company works predominantly with healthcare credit unions now, but does not limit its portfolio to doctors or medical staff. It’s given loans to everyone from optometrists like Glass to tattoo parlors to after-school sports programs. It’s also looking to make their credit union service organization larger by adding more banks.

“We will bring on new owners over time” Casselman said.

The process is similar to that of traditional lenders, with one glaring difference. Hayes and Casselman make a concerted effort to really connect with their clients. Before lending, they make a trip out to the business, discuss its structure with the potential borrower

“They took a look at the business, came to the office, went through the financials and asked all kinds of questions the largest banks don’t ask,” Glass said. “They took the time to learn what it’s all about to understand what I was trying to accomplish … She understands the business because they took the time and effort to.”

About eight months ago Glass initially made contact with Business Loan Link. He explained his business structure and what kind of loan he needed and Hayes and Casselman told him it wasn’t the right time, but gave him tips on what might help him.

Then about a month ago, they checked back in with the doctor and, after some minor adjustments, gave him the loan he needed.

To lend money -- its average loan is about $150,000 -- the credit union also wants to make sure the business is solid -- it doesn’t loan to true start-ups. Its requirements aren’t hard and fast, but generally its lenders like to see at least three years of experience in their field. They also look at business plans, lines of credit, equipment purchases and partnership acquisitions, in the case of doctors.

But what the company looks for is heart, ambition and a well thought out plan.

They are also flexible when it comes to terms and can do what a large bank takes a couple months to do in about two days, Casselman and Hayes said.

“We’re not going to lose a deal for price,” Casselman said.

Borrowers need to be members of one of the credit unions, which is an easy task. All it takes is living, worshipping or working in Orange County to qualify.