SPRINGFIELD, Va. — The U.S. Small Business Administration signed a memorandum of understanding with NAFCU aimed at expanding American entrepreneurs better access to small-dollar business loans.
SBA Administrator Maria Contreras-Sweet and NAFCU President Dan Berger signed the MOU Wednesday in a ceremony at Washington Gas & Light FCU, a $95 million credit union that plans to channel SBA-backed loans into its community.
The MOU with NAFCU comes on the heels of a similar agreement SBA recently signed with National Credit Union Administration (NCUA) which also seeks to increase accessibility of small-dollar SBA loans to U.S. entrepreneurs through the auspices of credit unions.
In addition, SBA recently added a tool to their website which will help link up aspiring entrepreneurs with small business lenders in their area (although credit unions are not included in the first phase of this new service).
In an interview with Credit Union Journal, the NAFCU's Berger said that the SBA is motivated to help small businesses and aspiring entrepreneurs gain access to capital loans for two major reasons. "First, small businesses are the engine for employment in the economy," he said. "As the economy improves, momentum is growing for more entrepreneurs to seek capital to build up their businesses."
Second, since the loan products being discussed are small in size, including micro-lending involving amounts as little as $50,000, it offers a perfect opportunity for credit unions, which specialize in such loans. "It's our sweet spot," he said, noting that big banks generally do not deal in such small loans.
