Willing and able to lend money.
Credit union business loans have increased every year since the start of the recession, says Mike Schenk, vice president of economics and statistics at the Credit Union National Association, a nonprofit national trade association serving U.S. credit unions.
Since 2007, credit unions have seen three years of double-digit growth in member business loans, while the commercial banking sector has experienced five years of decline, says Schenk.
“That’s a clear indication that credit unions are, from an underwriting perspective, more flexible, fully engaged in the market and willing and able to lend money to small businesses,” Schenk says.
Lower fees and better rates.
Since credit unions are not-for-profit whose owners are members and not stockholders, they don’t have to pay dividends. These savings are passed on to their members in the form of lower rates and fewer fees.
Streamlined, local loan approval.
While credit unions review small-business loans “just as stringently” as other financial institutions do, they also consider the relationship with the business owner and the community they serve. Staff live within the communities credit unions serve so all the decisions are local, which speeds up the process considerably.
Tips for small-business owners.
As much as we wish we could, we can’t just give away business loans to all members. If you want to increase your chances, there are two things to consider before applying.
Following the financial crisis, many business owners were abandoned by their banks and denied funding. Credit unions have stepped in to offer support where banks would not. The economic turmoil in the U.S. shone a light on the major differences between banks and credit unions, making clear to many what credit union members have known for decades.
When small businesses hit hard times, banks panic at the possibility of default and halt lending because they are profit-driven, not relationship driven like credit unions. If you are looking for funding for your small business, we may be able to help. Contact 918-664-6000 ext. 238 or send email to BusinessSolutions@OklahomaCentral.org.