SAN FRANCISCO (6/19/15)--A Thursday NerdWallet article highlights the potential benefits of obtaining small business loans from a credit union.
Credit unions are simply willing and able to lend money, Mike Schenk, CUNA vice president of economics and statistics, told NerdWallet. Credit union small business loans have increased every year since the start of the recession, Schenk said. (See related story: CUNA: New MBL rule could be 'step in right direction.')
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, said Schenk, citing data from the Federal Deposit Insurance Corp. and the National Credit Union Administration.
3Rivers FCU, Fort Wayne, Ind., has an approval rate of 46% for its member business loans, which is higher than the marketplace average of roughly 40%. Joshua Fern, a commercial lender for 3Rivers FCU, said the credit union has true relationships with its business members. If they have been members “their whole lives and they are starting up a business, and we have that relationship and track record with them, we are willing to take on that risk to grow with them,” he told NerdWallet.
Steve Schipull, CEO of Generations Community FCU, San Antonio, echoed Fern. While credit unions review small business loans “just as stringently” as other financial institutions do, they also take into account their relationship with the business owner and the community they serve.
“What may sound like a risk to someone from the outside may be a very sound business decision for someone inside the community,” Schipull told NerdWallet. “Credit union staff are based within the communities we serve, so all decisions---and the decision-making staff--are here. That speeds up the process considerably.”
“It’s not unusual for members to say that their loan officer is almost a partner, helping them develop their plans and making the lending process as seamless as possible” so they can focus on growing their business, added Troy Stang, president/CEO of the Northwest Credit Union Association.