The U.S. Small Business Administration and the National Credit Union Administration Are Working Together to Increase Access to Small Dollar Loans
Last Friday, Maria Contreras-Sweet, the Administrator of the U.S. Small Business Administration (SBA) and Debbie Matz, Board Chairman of the National Credit Union Administration (NCUA) signed a Memorandum of Understanding to expand the accessibility of small dollar SBA loans from credit unions. “This is an exciting partnership that will no doubt increase the awareness of the SBA loan programs for credit unions and then the services provided to aspiring entrepreneurs at the community level; this is an investment in entrepreneurial potential,” the Administrator said in a statement.
“This is a powerful partnership with significant potential, particularly for women entrepreneurs who we know rely on small dollar loans to start and grow their businesses. A unique aspect of the SBA and NCUA partnership is that SBA small dollar loans do not count against credit unions’ business loan cap, so they are well suited to expanding access to these loans. This provides flexibility to credit unions to distribute small dollar loans, increasing access to capital to local economies and enriching the entrepreneurial communities which credit unions serve,” said Presidentially-appointed Chair of the NWBC, Carla Harris.
Since 2011, the outstanding balance of SBA loans by credit unions has seen nearly a 50 percent increase – from $810 million to $1.2 billion. “This signals a growing demand for SBA loan programs. Millions of Americans have used their credit union to finance their car, home or children’s education. We want to empower credit unions to finance small business start-ups, too,” said SBA Administrator Maria Contreras-Sweet.
The partnership between the SBA and NCUA establishes a commitment to credit unions by helping them unlock their capacity to deliver SBA-guaranteed loans. This partnership also expands access to capital to encore entrepreneurs – individuals planning to start a business after earlier career endeavors, which is growing trend for women age 50 and above.
“We are so excited about this partnership and will certainly do our part to raise awareness about this important partnership. It is our mission to ensure aspiring and current women entrepreneurs and business owners have all the information they need and increased access to pursue more capital. This added capacity will hopefully encourage more women to move forward in expanding their businesses, ultimately creating more jobs and strengthening local economies,” said Carla Harris.