In an effort to broaden the availability and variety of credit for small businesses, the U.S. House of Representatives proposed legislation this week that would allow for credit unions to work with small business owners in choosing a loan package. The Credit Union Small Business Lending Act would also increase collaboration between the Small Business Administration and the National Credit Union Administration.
The bill would also guarantee 85 percent of small business loans provided by credit unions to borrowers who reside in designated under-served areas. These loans would not exceed $250,000, Credit Union Times reports.
The Senate proposed a similar measure this week. Senator Mark Udall of Colorado introduced the Small Business Lending Enhancement Act, which would double the amount of money credit unions can offer small companies, among other provisions. The measure would serve as an amendment to the bipartisan Jump-Start Our Business Start-Ups (JOBS) Act.
"Put simply, credit unions specialize in these 'small' small business loans," Udall said in a speech on the Senate floor Wednesday. "In fact, the average credit union small business loan is just $219,000. In contrast, the Federal Reserve has told us that many banks have quit considering loans under $200,000, because they aren't worth their time. Credit unions know these small business owners and they have money to lend them."
In light of the difficult lending conditions, many entrepreneurs and small businesses turn to online marketplaces like Boefly.com to connect efficiently with credit unions, banks and other lenders.
Credit union advocates also brought pressure to the steps of the White House this week. Fred Becker, president and CEO of the National Association of Federal Credit Unions delivered an open letter to President Barack Obama calling for support of the House-led Small Business Lending Enhancement Act.