CHARLOTTE, N.C. (4/5/12)--Small businesses in North Carolina are supporting credit unions' push to get passage of the bill that would increase their member business lending (MBL) cap, according to a report in The Charlotte Observer.
Several small businesses described to the Observer
(April 4) how credit unions saved their businesses after they were turned down by banks. They support a bill before Congress that would enable credit unions to make more small business loans by increasing credit unions' MBL cap to 27.5% of assets from the current 12.25% so credit unions can make more small business loans.
- David Settle, who owns a heating and air conditioning company, decided to refinance with Truliant FCU, Winston-Salem, because it was eager to loan to him while banks have not been willing to work with people, he told the newspaper.
- Joe Trettel, managing partner of aluminum product manufacturer Permatech Inc., near Greensboro, said he laid off half of his 105 employees and was on the verge of collapsing when Truliant FCU gave him a loan. Now the company is back at full strength.
- Victor Lytvinenko, co-founder and designer of Raleigh Denim, who received a $10,000 loan in 2009 from Coastal FCU, Raleigh, has grown into a 24-employee company. He told the newspaper his business grew in the middle of the credit crunch mostly because the credit union worked with it.
- Jim Dobbins, Sharp Interiors Inc., Winston-Salem, said his bank dropped him and seven other banks turned him down. His company, which earns about $10 million a year, was picked up by Allegacy FCU, Winston-Salem. "I'm with a credit union because they were the only alternative I had," Dobbins told the newspaper. "Without them, I wouldn't be here."
The article noted that several North Carolina credit unions are bumping up against the cap, or close to it. It cited the Credit Union National Association's (CUNA) statistics: credit unions hold about $40 billion in business loans, less than 6% of all small-business loan. Dan Schline, senior vice president of association services at the North Carolina Credit Union League, said the total has grown more than 44%.
If the cap is increased, North Carolina would likely see an additional $200 million in loans closed, creating 2,100 jobs, the league said.
CUNA projects that increasing the cap would inject $13 billion in new investments in small businesses, creating 140,000 jobs at no cost to the taxpayer.