CNN Money: CU Biz Loans Fill Big Bank Void Posted by AVCU on 11:34 AM

According to a recent CNNMoney article . . . “Spying an opening amid a credit crunch for many small companies, credit unions are expanding their offerings to entrepreneurs facing rebuffs from banks.” The article cites an example consumer seeking a small business loan who was twice turned down twice by JP Morgan Chase, but found success at a local credit union. 


According to the Small Business Association 30% of credit unions report giving out business loans reached in 2010, up dramatically since 1986. Other sources report that credit unions increased business lending by 4.5% in the 12 months ending in June 2011, while bank lending declined by 1.8% in the same period.


The article also explains the current cap imposed on credit union business lending, pointing out that credit unions that meet certain criteria are allowed to lend up to 12.5% of their assets or 1.8% of their net worth to businesses. However, credit unions are pushing Congress to pass the Small Business Lending Enhancement Act, a law that would allow credit unions to lend up to 27.5% of their total assets to businesses.


Read the article in entirety here.