Most of the time, when business owners (new entrepreneurs or experienced proprietors) think about financing their businesses, they think about their local banks – which they should. After all, they drive by these organizations everyday and might even have an account or two with them.
But, there are times when these banks might not be the best options for landing a needed business loan – either because the bank does not offer the loan product your company needs or because (like most of us these days) you just do not qualify under their heighten standards.
However, that does not mean that you still cannot get the financing your business wants – from start up funding to growing an established business – from a local financial institution other than your bank.
Did you know that some local credit unions also offer business loans? And, do you know that if they don’t, they do offer other financing products that you can use to start or grow your business?
Credit Unions For Business Financing
If you can get a loan from your bank – great. You should start there. But, if you can’t, simply drive right over to your local credit union and see what loan programs they offer.
Not only do you stand a good chance of getting the capital you need but you might be able to do it cheaper and with a lot less hassle.
Let me explain: First let’s call these CU for simplicity.
CUs, when it comes to business financing, offer the following benefits:
1) Business Loans – Some CUs do provide true business loans – the same products that your local bank offers. And, there are more of them doing this then you think.
Further, in many cases, if the CU does make business loans they usually don’t have such high credit standards that other lenders do. CUs tend to focus more on how your business and their loan impact the community at large – not just their bottom line. Most CUs have lower credit score requirements, better debt ratio limits, lower overall collateral value levels and usually spend less effort on scrutinizing income and tax return information. Simply put, their business loans (the same products that banks and other business lenders offer) are easier to qualify for.
According to State Employees’ CU in Raleigh, NC, when talking about how they underwrite their loan products:
Our focus is not on profits, but on fair, quality service.
So, not only are there underwriting criteria easier to pass, but since they make their loan decisions locally, they tend to take more of your story into account – which only benefits you and your ability to get approved.
2) Personal Loans – while banks also offer personal loans, again, CUs have easier approval standards. And, they are more flexible in the products they offer – making their loans fit you and not the other way around. visit website to get details
Now, you might think that you don’t want a personal loan for your business. But, I am here to tell you that all loans, business, personal or otherwise, from banks, CU, or private lenders, are in fact all personal loans.
Here’s why. You apply for a business loan – the type of lender does not matter – and you jump through all the hoops required to qualify. They look at your revenue or income, they look at your current debt, they look at and valuate your collateral and in the end, they approve your request.