KNOXVILLE, Tenn. (3/20/14)--A Tennessee-based credit union has put a new twist on member business loans, though to some reality television viewers the concept might already be familiar.
Similar to the show "Shark Tank," where entrepreneurs pitch their businesses to a panel of potential investors, UT FCU, Knoxville, Tenn., has rolled out a program where people looking to launch a startup can present their idea, and if a panel of non-credit union advisers sign off, the $214 million-asset credit union will offer up funding to start the business.
Labeled micro-funding, the loans are smaller in size and usually carry longer payback terms to allow the businesses time to shore up their outfits.
Small or not, the funding goes a long way in supporting entrepreneurs who wouldn't normally have the means to launch their operations, said Jonathan Patrick, UT FCU senior vice president.
"There's plenty of people right now who are working in day jobs that have got a great idea, but they don't know where to start and they certainly don't have the $30,000 sitting in the bank to put into this idea to launch it in the first place," Patrick told ABC affiliate WATE 6.
In a three-step process, applicants apply online where they describe their business and lay out all the pertinent financial details and full business plan. The final step is the in-person pitch.
Those who receive the thumbs up and are awarded loans also receive connections to local resources who help the business owners get their operations off the ground.
The program has only been available for several weeks, however the credit union has received a number of applications, according to the WATE 6 report.