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IEntrepreneurI CUs come to the rescue on biz loans
WASHINGTON (8/23/10)--When their bank slashed the credit limit on their business credit card despite on-time payments, the partners of WheretoFindCare.com, a Ypsilanti, Mich., healthcare information service, moved their accounts to a local credit union and found all the services the small business needed, according to Entrepreneur magazine (Aug. 20). There, they found all the services the small business needed, said the article, entitled, "Credit Unions to the Rescue?" Another small business owner, Tom Hoebbel of Brooktondale, N.Y., described how a loan from his credit union enabled him to expand his photography business to online video services. Hoebbel needed $25,000 to purchase new equipment and found the loan his county offered took too long. The credit union helped Hoebbel apply for an interim Small Business Administration loan. This let me move much more quickly [into Web-based video sales] than if I had to wait for the county loan, which ended up taking more than nine months," he told the publication. Hel decided to work with the credit union because of its free business checking services, which saves him $15 to $20 a month, and because if offered a 12-week business course to its small-business members. Credit union lending to members for business purposes is a fast-growing segment, up 10% in 2009, Pat Keefe, vice president of communications and media outreach at the Credit Union National Association (CUNA), told the publication. The average loan is $220,000 and credit unions are limited to lending 12.25% of their assets, but a measure in Congress would increase that limit and pour $10 billion in new loans into small businesses, he said. The level of personal service that Hoebbel got is a definite advantage of credit unions, said Keefe, who noted credit unions' lower rates and stringent lending standards. In 2009, credit unions had a lower charge-off rate in business loans than banks, 0.59% vs. banks' 2.36%, he added. CUNA provided other statistics for the article, and the article referred readers to CUNA's credit union locator. For the full article, use the link.
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