MADISON, Wis. (3/14/12)--Credit unions offer a viable option for small businesses seeking financing, according to a Credit Union National Association (CUNA) economist who was quoted in an Entrepreneur magazine article that appeared online.
"Because credit unions are member-owned financial cooperatives, we don't have to make a lot of money," Mike Schenk, CUNA vice president of economics and statistics, said in the article, headlined "When Seeking Funding, Credit Unions Can Be Worth Checking Out."
"You'll often find interest rates and fees lower than at commercial banks, and because the small-business borrowers are members, the credit union leadership is often likely to have more flexibility in lending to them," Schenk added.
At the same time, credit unions are not willing to take a lot of risk, so it's important the business owners clean up their credit reports before seeking funding from credit unions. But credit union loan officers often have more authority than loan officers at larger banks, the article said.
Pat Keefe, CUNA vice president of communications and media relations, also contributed to the entrepreneur.com article. Keefe outlined the types of business services most credit unions offer.
CUNA and credit unions are pressing Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.