Credit unions are becoming an increasingly popular source of financing for small businesses. Many small business owners are turning to credit unions because they offer competitive interest rates and fewer fees than traditional banks.
Do Credit Unions Offer SBA Loans?
Yes, some Credit Unions offer SBA loans. For example, these top 10 credit unions offer SBA loans:
- Navy Federal Credit Union
- Goldenwest Credit Union
- Boeing Employees Credit Union
- First Tech Federal Credit Union
- Redwood Credit Union
- America First Credit Union
- Patelco Credit Union
- Star One Credit Union
- SchoolsFirst Federal Credit Union
- Advantis Credit Union
The answer is yes, although not all credit unions do so. Some credit unions specialize in providing SBA loans, while others may only offer them as a secondary product. Credit unions participating in the SBA loan program must follow the same guidelines and regulations as larger banking institutions. This means borrowers must still meet specific qualifications and requirements before being approved for an SBA loan from a credit union.
Please read our article about SBA Loan Status Disbursed Current. Additionally, learn more about Bankruptcy Clear SBA Loans!
The Difference Between SBA loan and Credit Union SBA loan
The main difference between SBA loan offers from credit unions and the SBA itself is the entity providing the loan. When you obtain an SBA loan directly from the SBA, the federal government is the lender and guarantees a portion of the loan. In contrast, the participating lender (such as a bank or credit union) provides the remaining financing.
When credit unions offer SBA loans, they are participating lenders approved by the SBA to provide financing through the SBA loan programs. The credit union provides the funding and underwrites the loan. However, the SBA still guarantees a portion of the loan, which reduces the credit union’s risk and makes it easier for small businesses to obtain financing.
Another difference is that credit unions may have different loan terms, rates, and fees than SBA loans obtained directly from the SBA or other participating lenders. It’s essential to shop around and compare loan offers from different lenders to find the best SBA loan option for your business.
The main difference between SBA loan offers from credit unions, and the SBA itself is the entity that provides the loan and underwrites the financing. While the SBA still guarantees a portion of the loan in both cases, credit unions may have different loan terms and rates than SBA loans obtained directly from the SBA or other participating lenders.
The main benefit of getting an SBA loan from a credit union is the borrower-friendly terms available. Since credit unions are nonprofit organizations owned by their members, they generally have more flexible lending terms than traditional banks. They also tend to prioritize local businesses, which can be beneficial when seeking a business loan in your community.
Another advantage of working with a credit union instead of a bank is lower interest rates on your loan. Credit union loans often come with lower interest rates than traditional banks, making it easier for borrowers to repay their loans over time without accruing too much debt. Even if you don’t qualify for an SBA loan from a bank or other financial institution, you may still be able to get one from your local credit union at favorable terms.
When applying for an SBA loan from a credit union, understand what each lender offers and how the process works before signing any agreement or submitting any application materials. Be sure to compare offers from multiple lenders to find the best deal possible on your small business loan.
After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management.
At Promtfinance.com, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification.
Read more on Daniel Smith's biography page.
Contact Daniel: daniel@promtfinance.com