It appears that small businesses aren’t getting the financial help they formerly received from credit unions. A recent small business lending report shows that bank loan approvals, though low, have risen a full 7% within between May 2012 and May 2013. On the other hand, the approval percentage for small business loans has plummeted by nearly 12% from credit unions within the same time period. The combination of regulations limiting the credit union lending percentage to just 12.25%, and the speed at which banks approve their clients may be the cause for such a decline because it creates lending restrictions.
For small businesses and startups eager for financing, this could be a potentially damaging situation, as credit unions are non-profit, member-driven organizations. Credit unions give members a say in how things occur, they offer lower lending rates, less fees and are often willing to work with clients who have a poor financial background. But if this recent drop continues, small businesses may not be able to enjoy such benefits.
For more information on credit union lending to small businesses, check out this link: http://www.businessweek.com/articles/2013-06-13/are-credit-unions-saying-no-to-more-small-businesses#r=hpt-ls