Small business loans have been made available through various sources, like the SBA and from traditional lenders, but there are also alternative options from credit unions that may offer more borrowing opportunities outside of traditional banks. While, again, there have been reports that many major financial institutions have increased their small business lending over the past months and there are new programs and initiatives being implemented by the SBA to provide more financing to companies in underserved areas, consumers may be able to benefit from a small business loan offered through a credit union, if they may have trouble accessing a line of credit or capital from other sources.
There have been many businesses that have turned to credit unions initially as a way of finding access to capital for their company due to the fact that these organizations may be more affordable and offer a more one-on-one relationship with their borrowers. While there are small business advisors in the majority of financial institutions that will offer a small business loan, many businesses have turned to these alternative lenders as both credit unions and even small community banks may be an easier source of business lending.
Obviously, businesses will need to be in a financial position to qualify for a credit union small business loan, but these companies may be more willing to help an individual or business they know from their area and will obviously require that the borrower be a member of their credit union which can tilt the scales in their favor of a business owner in some cases due to qualifications that must be met to join most credit unions. Businesses need to understand, though, that credit unions are not a guarantee when it comes to getting a small business loan despite the fact that many credit unions are calling for the ability to do more lending.
In an article on MarketWatch.com, it was stated that, “…almost one-third of the country’s 7,500 or so credit unions offer loans to small businesses.” Yet, there are some banks that are opposing the ability of these credit unions to increase the total percentage of assets a credit union can put towards small business lending, but many credit unions arguing for the ability to lend more to smaller companies, which could lead to more competition and availability in the small business loan market.
While there have been many other top lenders, like Bank of America, J.P. Morgan Chase, and Wells Fargo, who have reportedly increased their small business lending initiatives, programs from the SBA and options from credit unions still remain open for businesses in need of access to capital or credit in the hopes of furthering their business initiatives or simply getting their company off the ground. Again, there are no guarantees for businesses despite these reports of lending increases in the area of small business loans, but companies who may have been denied a loan from a major financial institution could find the small business assistance they need through one of these alternative borrowing options. However, companies must make sure that they are in a financial position to acquire, properly use, and repay these debts, as there could be good reasons that some banks have denied a particular company a loan. Businesses may either need to better present why they are a safe credit risk or get in a more advantageous financial position before seeking a loan from either a credit union or traditional bank.