Oct. 4, 2012 – Credit unions are playing “a growing role” in helping small businesses access capital, and the Small Business Administration is looking to build on this momentum via greater participation in its programs, SBA Administrator Karen Mills wrote in the CUTimes this week.
In the Oct. 1 op-ed, “Supporting Small Businesses,” Mills notes that credit unions’ member business lending “has grown in nearly every quarter since the economic downturn” and that the low-income designation is one way that even more loans can be made. Noting that there are roughly 1,000 credit unions eligible for the designation, Mills points out that low-income credit unions are exempt from the cap that restricts lending to small businesses.
Qualified community development financial institutions can now take advantage of SBA’s existing product lines, she said, and the recently streamlined and simplified loan process can help boost small loan volume. “And it should be noted that credit unions benefit from lending with support of SBA’s 7(a) program because the guaranteed portion of the loan does not count against their lending cap,” she wrote.
Mills added that expanding credit union lending “can ensure that more small businesses have the type of partnership that is needed to build successful businesses that serve as anchors of our communities and create good jobs in our neighborhoods.”
NAFCU has long argued that the credit union member business lending cap hurts small business and will also, over time, constrain credit unions’ ability to participate in SBA programs.
NAFCU continues to urge credit unions to reach out to lawmakers about the association-backed MBL bills (S. 2231 and H.R. 1418) while they are in their home districts.