WASHINGTON - Credit unions are flocking to take advantage of a three-month-old ruling that expanded membership eligibility in the Small Business Administration's guaranteed loan program.
The number of credit unions participating in the 7(a) Loan Guaranty Program has increased by 21% since Jan. 1, to 92, and another half-dozen are expected to be enrolled this month, according to James Hammersley, the SBA's director of loan programs.
Mr. Hammersley attributed the rising interest to a February ruling by the agency that opened its loan program to all credit unions. Under the previous rules, only those with community charters were eligible to make 7(a) loans.
Though the SBA is not actively marketing the program to credit unions, Mr. Hammersley said that the major credit union trade groups are encouraging members to use its loan guarantees. The SBA welcomes credit union participation, because it aims to get more capital into the hands of small minority- or female-owned businesses, he said.
"The credit unions have access to a lot of folks out there who do not have access to or do not use traditional banking institutions," Mr. Hammersley said.
