ALEXANDRIA, Va. (2/9/15)--The National Credit Union Administration and U.S. Small Business Administration (SBA) announced a partnership Friday intended to help small businesses connect with local credit unions to get better access to capital.
The NCUA and SBA signed a memorandum of understanding (MoU) outlining a series of educational initiatives during the next three years that include webinars, examiner training on SBA programs, data resources and media outreach.
"SBA-guaranteed loans made by credit unions provide needed capital for existing small businesses and startups that might have difficulty obtaining loans from other institutions," said NCUA Board Chair Debbie Matz. "With a significant portion of principal guaranteed by the full faith and credit of the United States government, SBA loans rank among credit unions' safest loans."
Matz added that there is "vast untapped capacity" for credit unions to make more SBA loans, which the partnership plans to unlock.
The MoU notes that the NCUA and SBA agree on the importance of providing access to loan programs for small businesses, especially underserved borrowers. The primary objective is to increase credit union awareness of SBA programs. (See related story: SBA, with CUNA, Ohio league, to spotlight benefits of agency programs.)
SBA Administrator Maria Contreras-Sweet called the partnership a natural fit, due to the fact that "credit unions are some of this nation's most trusted mission-based lenders."
The guaranteed portions of SBA-backed loans do not count against credit unions' cap on member business lending. SBA guarantees range from 50% up to 90% of the principal of each loan, depending on the loan type.
A joint webinar featuring the two agencies has been scheduled for 3 p.m. (ET) March 4.