Kentucky businesses depend on small financial institutions like credit unions to secure the capital they need to grow and thrive, Jefferson Country FCU CEO Heather Walter wrote in the Louisville Courier-Journal this week. Walter highlights the abundance of small businesses in Kentucky--99% of businesses in the state have less than 100 workers—and how credit unions are able to serve them.
Credit unions use these assets to support small businesses in several ways. First, they're more likely than banks to provide loans to small-business owners. In May, credit unions approved 40% of loan requests from such firms, according to the Biz2Credit Small Business Lending Index. Just 27.5% of big banks did the same.
Walter notes that in the 10 years from June 2007 to December 2017, business loan growth at credit unions grew 460%, while banks grew 26.4% over that same period. She also highlights the $71.5 million in benefits Kentuckians saw in 2017 from credit unions.
“Because credit unions are locally owned, they put their capital to work in their communities. That's good for the state economy,” she wrote. “Every credit union's members have some commonality. They may live in the same town or work for the same company or labor union. A credit union's assets aren't loaned out to people half a world away… Credit unions fund local projects not just by extending loans but also by paying taxes. Across the nation, they paid $17.1 billion in federal, state, and local taxes in 2016.
“Kentucky's credit unions play a vital role in helping local businesses grow — and supporting the state economy,” Walter added.