EXECUTIVE鈥橲 DESK
How credit unions can make banking better for businesses
There鈥檚 a popular statistic commonly referenced in the business community: over half of small businesses fail within the first year.
While this figure isn鈥檛 true 鈥� first-year survival rates are actually around 80% 鈥� it does indicate the unmistakable perception that starting a business is hard.
The difficulty is proven by the fact that roughly half of small businesses do fail within the first five years after opening. Year one often isn鈥檛 the hardest part; sustaining over the first 24 to 48 months is where the real challenge comes in.
During that period, business activities start to move fast. Sales ramp up. Owners begin hiring new employees. More vendors and management systems are onboarded. Scale becomes the test.
Because of these complex factors, small business owners and entrepreneurs need financial partners who can adapt to their challenges and meet them where they鈥檙e at. Instead of relying on one-size-fits-all banking, tailored products and services offer flexibility for moments when time is truly of the essence and problems loom large.
That鈥檚 where credit unions provide a true difference.
Here in Albuquerque, our team at Sunward has worked with local businesses like Little Bear Coffee and Ex Novo Brewing Co. Both have successfully navigated recent expansions in crowded brewery and coffeehouse markets.
For nearly 30 years, I鈥檝e helped businesses like Little Bear and projects like Zia Flats, a unique housing development in Santa Fe, find the right financial solutions. Through countless early-morning and late-night phone calls with entrepreneurs, I鈥檝e learned critical lessons about what makes the difference between success and failure.
Some of those lessons include:
鈥� Establish a few separate accounts for distinct business purposes, like operating expenses, payroll, taxes and buffer funds.
鈥� Actively manage liquidity by matching operating cash, reserve funds and short-term investments to actual cash-flow needs. Excess balances should always serve a purpose.
鈥� Choose the right payment rail for efficiency, cost and timing. Optimizing how money moves can reduce costs, improve vendor relationships and strengthen working capital.
鈥� Understand the options in front of you. Trusted financial partners can help you find ways to enhance your operations through new systems and services.
鈥� Develop deep relationships with your financial partner. In New Mexico, we value local connections. Never be afraid to pick up the phone and call your credit union directly.
One example ties these lessons together. My team recently helped a large local contractor navigate a payroll issue. When a system failure prevented the company from meeting the usual payroll deadline, we were able to quickly send wires, transfers and cashier鈥檚 checks to employees to ensure they received their pay on time. Going from system failure to successful payments took less than 24 hours altogether.
It鈥檚 this type of service that truly differentiates credit unions from banks. It鈥檚 why credit unions are rooted in the mission of 鈥減eople helping people.鈥� As not-for-profit cooperatives, our success is driven by your success. We don鈥檛 have shareholders; we have members who live and work in the same communities as us.
Because of this community focus, how we improve our business products and services is directly informed by feedback from those we work with. When you bank with credit unions, you have the chance to tangibly shape your banking experience 鈥� something you don鈥檛 often get with other financial institutions.
For instance, our recent work with a local architecture and design firm helped enhance our account toggle feature, allowing users to more easily switch between business and personal profiles in online banking.
Alongside all of this, there鈥檚 one more lesson I鈥檇 give to all small business owners and entrepreneurs. One of the major trends in consumer behavior is the growing appeal of local brands. Young, Gen Z shoppers see value in spending their money on local, trusted organizations, as opposed to large, multinational corporations.
When you bank with a local credit union, you reflect those same values. You signal to your customers that you鈥檙e just as invested in your community as they are.
Nathaniel Armendariz is the director of treasury management for Albuquerque-based Sunward Federal Credit Union. Executive鈥檚 Desk is a guest column providing advice, commentary or information about resources available to the business community in New Mexico. To submit a column for consideration, email mnarvaiz@abqjournal.com.
