Business owners who are finding it difficult to acquire a small business loan from a traditional bank at times turn to alternatives like credit unions as a way to get the funding they may need and potentially work with them to build a relationship that is with a local institution and potentially offer added benefits that come from certain types of lending from these institutions. Obviously, business owners who find that they can develop a more personal relationship with lenders are in a position where they may find that borrowing becomes easier when a lender is more aware of their business operation within the local community, but this may also be helpful to businesses when financial troubles arise and repayment on a small business loan may be difficult for a set time.
However, we have seen some opposition when it comes to increasing the amount of borrowing power that credit unions have as there are some officials who feel that allowing unions to lend to small businesses at a higher percentage of their overall assets could be detrimental as credit unions may be able to make more loans without having to pay taxes, and there are arguments that this can be detrimental as some of the major small business lenders, like traditional banks, will be contributing more in terms of taxes when making these loans.
This is obviously a debated issue among traditional banks and credit unions as there are some small business owners who feel that they should have the opportunity to borrow from a variety of lenders, and not simply rely on certain banks when it comes to getting the small business financing they need. While there are arguments that many credit unions have not even gotten near the cap on the amount of small business loans they can borrow, credit unions are still in a position where they want to have the opportunity to loan more for small businesses when traditional financing from a major bank may not be available.
Arguments from credit unions have surrounded the fact that major small business lenders are cautious at the present time and may not be allowing access to credit in such a way that is helpful for businesses, but there are also arguments that some businesses are simply unwilling to borrow or may not be in a position to where a small business loan is affordable for their situation. Small business owners looking for loans do still have opportunities from credit unions, but again, there are instances where a credit union may be unable to lend simply because they are nearing their cap on the amount they can lend yet this is obviously not going to always be the case for potential borrowers. While this issue remains a problem for some, there are still opposing opinions on this issue as some banks feel that allowing credit unions to make more small business loans could be problematic but of course these credit unions are looking for the opportunity to lend more to small businesses at the present time.