CUs Hit $100M Mark In SBA Loans

Register now

Credit unions have not produced more than $100 million in Small Business Administration (SBA) loans since expanding the program to credit unions in February of 2003.

NCUA reported that through Sept. 30, loan production with the SBA through approved credit union lenders had produced 1,172 loans, totaling $122,695,618 in loan guarantees. The average SBA loan approval amount is $104,689, the agency said. Currently, 253 credit unions are authorized SBA 7(a) loan program lenders.

"The growing demand for small business lending means credit unions are filling a niche needed by emerging and growing small business owners," said NCUA Chairman JoAnn Johnson, who has made member business lending a priority during her term. "Credit unions can and are meeting the business lending needs of their members. The doors opened at the SBA for credit unions; and likewise, credit unions are helping their members open the doors to their new small businesses," Johnson said.

Overall, NCUA reported that as of June 30, there are more than 1,771 or nearly 20% of federally-insured credit unions providing business lending to their members. With 94,214 total member business loans outstanding, the average loan size was $152,130.

In 2004, NCUA began directing its regional directors to encourage waivers for credit unions to make SBA 504 loans, which are guaranteed by community-based non-profit organizations.

NCUA also issued a legal opinion letter with new interpretations to make several MBL terms consistent with SBA's 7(a) program - SBA's primary program to guarantee loans for a wide range of business needs.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER