Best Place For Small Business To Get Loans
Most credit unions didn�t get in on the subprime-loan market, so
they�re not hurting like many banks. Many also have extra cash as
investors have fled the stock market and put the money into savings
accounts. About 27% of the 8,147 credit unions in the U.S. offer
business loans, according to the Credit Union National Association,
a trade group based in Washington (DC).
The amount of business loans was up 18% last year to almost $33
billion ($28 billion in 2007) and the average loan size is
approximately $215,000. A 1998 federal law caps the amount of
business loans credit unions can issue�currently 12.25% of assets.
Credit unions hope to convince Congress to raise the limit to 20%,
but the banking industry opposes any changes to the legislation.
Keith Leggett, a senior economist at the American Bankers
Association says credit unions were established to serve �people of
modest means� and should focus on consumers.
Credit unions are chartered as nonprofit cooperative institutions
owned by their members. Like other financial institutions they are
regulated, and deposits are insured up to $250,000.
Credit union officials contend they could provide $10 billion in
small business loans within the next 12 months without costing
taxpayers a nickel if there was a new higher cap.