Restaurant publication notes how CUs aid small biz

ST. PAUL, Minn. (10/17/06)--Credit unions are becoming "financial saviors" for small businesses in search of financing, according to a story in the October 2006 issue of Restaurant Business.

The story narrates how Twin City Co-ops FCU in St. Paul, Minn., helped Joe Bennett achieve his dream of buying a restaurant. Although Bennett had 25 years in the restaurant business, his bank refused to give him a business loan and suggested he use a home equity loan instead.

Bennett contacted Twin City Co-ops based on friends' recommendations. The credit union provided funding for a $50,000 down payment, plus another $50,000 for restaurant improvements.

Minnesota had the country's highest year-to-year growth in the percentage of credit unions offering business loans, a number that grew 9.1% when 2005 is compared to the previous year. Credit Union National Association (CUNA) figures show that 37.3% of Minnesota credit unions provide business loans.

The restaurant publication noted that one reason that banks may be less responsive to the needs of local businesses is the trend of continuing consolidation, which moves ownership of local branches to large national banks.

In contrast, the article states, credit unions are member-owned organizations that remain focused on local communities. More credit unions nationwide also are participating in Small Business Administration loan guarantee programs, which means more credit unions have the ability to aid local businesses.

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