Top Credit Unions for Small Business Loans
Getting a small business loan can be challenging, but working with the right lender can make all the difference. Credit unions are a great option for small business owners looking for financing. They often offer better rates and terms compared to big banks.
When evaluating credit unions for a small business loan, there are several key factors to consider:
-Interest Rates
Interest rates from credit unions are typically lower than rates from big banks. According to NerdWallet, the average small business loan rate from credit unions is around 7-13%. Rates will vary depending on your credit score, collateral, and other qualifications. Be sure to shop around and compare rates across several credit unions to find the best deal.
Loan Amounts
While credit unions may not be able to match the loan sizes offered by major banks, many still provide sizable loan amounts perfect for small businesses. Loan amounts often range from $5,000 up to $250,000 or more. Check the typical loan sizes offered by a credit union before applying to make sure they provide the funding you need.
Flexible Terms
Credit unions offer more flexibility than banks when it comes to loan terms. This includes options like interest-only payments to start, longer repayment periods, and early payoff options without penalties. The ability to customize payment plans can be invaluable for a small or early-stage business.
Personalized Service
Instead of dealing with an impersonal banker who handles thousands of customers, credit unions provide one-on-one personalized service. You’ll work directly with a business lending specialist who takes the time to understand your unique business needs. This can lead to faster loan decisions and a smoother overall borrowing experience.
Lower Fees
From application fees to late payment charges, banks have all kinds of hidden fees that quickly add up. Credit unions are non-profits, so they generally have lower (or no) fees associated with their small business loan products. This saves you money over the duration of your loan.
With these benefits in mind, here are 10 top-rated credit unions for small business loans:
1. State Employees’ Credit Union (SECU)
With over 2.5 million members, SECU is one of the largest credit unions in the U.S. They offer excellent small business loan and line of credit options. SECU business loans range from $5,000 up to $500,000. Term lengths reach up to 10 years for larger loans. Competitive variable and fixed rate loans are available. You’ll also benefit from low fees and personalized support from SECU’s business services advisors.
2. Alliant Credit Union
Alliant Credit Union is one of the top online credit unions nationwide. While they don’t have local branches, their digital banking platform offers convenience and flexibility. Qualified business members can borrow up to $250,000 with Alliant business loans. No collateral is required for loans up to $50,000. Alliant offers expedited funding as soon as the next business day on approved applications.
3. Pentagon Federal Credit Union (PenFed)
As the second largest federal credit union, PenFed has plenty of resources to help fund your business. They provide both term loans and lines of credit up to $500,000. PenFed offers some of the most competitive rates available, with both fixed and variable APR options. Loan terms range from 1-15 years. They also have a fast application process and funds can be available quickly after approval.
4. Patelco Credit Union
Headquartered in California, Patelco CU offers both secured and unsecured business loans up to $250,000. As a member-owned cooperative, Patelco provides excellent service when it comes to lending. They take the time to understand each borrower’s unique situation. This personalized approach combined with competitive rates makes them a go-to option on the West Coast.
5. Suncoast Credit Union
Florida-based Suncoast CU has been operating for over 85 years. They leverage this expertise with specialized lending solutions for small business owners. Suncoast offers lines of credit, SBA loans, equipment loans, and commercial real estate loans up to $5 million. Streamlined applications and fast time-to-funding makes them an appealing choice for Florida businesses.
6. SchoolsFirst Federal Credit Union
As one of the largest credit unions in California, SchoolsFirst FCU brings over 80 years of lending experience. Their small business offerings include term loans, lines of credit, SBA loans, and commercial real estate loans up to $3 million. Equipment financing is also available. SchoolsFirst has a reputation for flexibility, often extending credit to early-stage businesses other lenders turn down.
7. Golden 1 Credit Union
Golden 1 CU first opened its doors in Sacramento back in 1933. Today, their commercial lending team provides funding up to $5 million for California businesses. From equipment loans to commercial mortgages, Golden 1 offers a diverse mix of borrowing options. Streamlined applications and local underwriting allows them to fund loans quicker than most banks.
8. Lake Michigan Credit Union (LMCU)
Operating across Michigan, LMCU offers both term loans and lines of credit to qualifying business members. New businesses can borrow up to $100k without needing collateral or financial history. More established businesses can qualify for up to $2 million in financing. Competitive rates, flexible terms, and stellar customer service has earned LMCU acclaim from members.
9. Veridian Credit Union
Based in Iowa, Veridian CU provides funding from under $10,000 up to $5 million. Their business lending experts take time to understand your operations to create a customized lending solution. Veridian offers commercial mortgages along with term loans and lines of credit. Local underwriting helps streamline the application and funding process.
10. Maps Credit Union
Since 1935, Maps Credit Union has served New York businesses with lending solutions. They offer term loans up to $150,000 with no application fees. Lines of credit up to $100,000 are also available. Even brand new startups can qualify for funding. Reasonable rates, flexible terms, and prompt decisions makes Maps CU a go-to lender in the state.
Choosing the Best Credit Union Lender
As you can see, credit unions provide a viable alternative to big banks when it comes to getting a small business loan. Lower rates, flexible terms, and personalized service are just a few of the advantages available. Each credit union has its own unique offerings, so be sure to do your research to find the right lender.
Here are some final tips when selecting a credit union partner for your small business loan:
- Check membership eligibility requirements before applying
- Compare interest rates across multiple credit union lenders
- Ask about fees, terms, loan amounts, and repayment options
- Inquire about funding timelines and application processes
- Look for personalized business banking and lending support
- Read online reviews and feedback from other borrowers
- Make sure they offer the loan purpose and amount you need
Finding the right loan for your business doesn’t have to be hard. Community-focused credit unions want to help local entrepreneurs and small business owners pursue their dreams. With better rates, flexibility, and service, they should be a top consideration when you need funding fast.
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I hope this overview on the top credit unions for small business loans has been helpful. Let me know if you have any other questions!