Aspiring entrepreneurs who need capital now have more options when it comes to finding a potential lending institution. The Small Business Administration (SBA) announced last week that it has authorized credit unions to offer government guaranteed loans to small businesses.
The SBA estimates that 1,500 credit unions will join the lending network, which helps finance existing and start-up small businesses. By including credit unions, the SBA expects to expand its pool of lenders by 30 percent.
The new initiative is part of the Access Across America, a program administered by the National Credit Union Administration (NCUA), an independent federal agency that charters and supervises the nation's 10,000 credit unions. Access Across America works with government agencies to provides financial services, affordable housing, and economic development opportunities.
In June 2002, Deborah Matz, a NCUA board member, met with Hector Barreto, the SBA administrator, to encourage the SBA to allow credit unions to participate in the government loan program. Matz said that credit unions would be especially effective in helping the SBA reach businesses needing small amounts of capital. In many cases, said Matz, banks won't consider loans to these businesses because the loan amount is too small.