Small Businesses

Credit unions are better for small businesses by expanding loan opportunities and empowering job growth.

Filling the Gap for Small Business

Credit unions have been making member-business loans (MBLs) since their inception in the early 1900s. In the first 90 years of their existence, there was no cap on business lending. The current cap was imposed by Congress in the Credit Union Membership Access Act of 1998. This arbitrary cap limits most credit unions to lending no more than 12.25% of their assets to small businesses without any economic, safety and soundness, or historical rationale.

For credit unions, service is a core part of our work to financially support consumers across the country – including veterans. When a service member returns to civilian life, they often look to continue giving back to their community. For many – at least 25% of veterans – that means starting a small business. However, the Institute of Veteran Military Families, “accessing capital is a top challenge in starting and growing a business” for 75% of reporting veterans.

Nearly 1,900 credit unions provide small business loans to their members, but regulatory burdens are holding credit unions back from doing more to help local economies. By broadening access, credit unions’ people-first focus becomes available to more veterans. With our willingness to look beyond credit scores and collateral to assess loan opportunities, and history of making much-needed yet smaller loans than other financial institutions are willing to make – this can make or break a veteran’s ability to get the loan they need to serve their business and community.

Hipolito M.’s CU Story LincOne Federal Credit Union
Heather’s Story Liberty First Credit Union