Credit unions are member-owned and managed financial institutions; they function much like banks, with share drafts (checking accounts), credit cards, and online banking. Individuals join a credit union to take advantage of the financial services offered, including business loans to members (MBL's).
Credit Unions as Business Lenders
Credit unions lend to businesses, mostly to smaller businesses; in 2007 the average MBL was $180,710. Although credit unions are restricted by regulationsthat prohibit them from making MBL's in excess of 12.25 percent of their total assets, they still do provide business loans.
Credit Unions and the Small Business Administration
Credit unions also offer SBA 7(a) loans; the average credit union-funded SBA 7(a) loan is $82,850. Although credit union SBA 7(a) loans make up only a small number of these SBA loans, these SBA guaranteed loans may be available through a local credit union.
In short, if you are looking for a business start-up loan, particularly for a smaller amount, check with the larger credit unions in your area to see if they can help.