WASHINGTON, Feb. 6, 2015 /PRNewswire-USNewswire/ -- U.S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet and National Credit Union Administration (NCUA) Board Chairman Debbie Matz signed a Memorandum of Understanding (MOU) to invest in America's entrepreneurial potential by expanding the accessibility of small dollar SBA loans from credit unions. By partnering together, the two groups will be able to increase awareness about SBA's loan programs for credit unions and the NCUA.
"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. 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 Administrator Contreras-Sweet.
This partnership between the SBA and NCUA establishes a commitment to credit unions by helping them unlock their capacity to deliver SBA-guaranteed loans. The SBA is making small dollar loans a top priority in efforts to increase business lending and reach to underserved borrowers. Once a loan is approved, the SBA has a vast network of resource partners such as SCORE, Women's Business Centers (WBCs), and Small Business Development Centers (SBDCs) to offer free counseling and technical assistance to help small business owners deploy their working capital and grow their businesses and revenues.
"This is a tremendous opportunity for credit unions and small business owners," NCUA Board Chairman Debbie Matz said. "SBA-guaranteed loans made by credit unions provide needed capital for existing small businesses and start-ups that might have difficulty obtaining loans from other institutions. With a significant portion of principal guaranteed by the full faith and credit of the United States government, SBA loans rank among credit unions' safest loans. There is a vast untapped capacity for credit unions to make more SBA loans. This initiative will help us unlock that capacity and put it to work for credit unions, their members and their communities."
An additional benefit of this partnership is that it expands access to capital to encore entrepreneurs, individuals planning to start a business after earlier career endeavors. The average age of credit union members is 47 and the fastest-growing group of entrepreneurs consists of men and women age 50 and above, spurred by the low cost of starting a successful small business in the Internet age.
This MOU boosts access to capital to America's 28 million small businesses and aspiring entrepreneurs. Access to capital is a fundamental pillar in starting and growing a business, therefore this announcement is one of the many ways SBA is bolstering its commitment to America's small businesses and entrepreneurial potential.
As a champion for small businesses, Contreras-Sweet has made it a priority to engage smart, bold, and accessible partnerships to support and elevate our nation's entrepreneurs.
The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. We recognize that small business is critical to our economic recovery and strength, to building America's future, and to helping the United States compete in today's global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam. www.sba.gov
The National Credit Union Administration (NCUA) is the independent federal agency that regulates, charters and supervises federal credit unions. With the backing of the full faith and credit of the U.S. government, NCUA operates and manages the National Credit Union Share Insurance Fund (NCUSIF), insuring the deposits of more than 95 million account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions. For more information, check out www.ncua.gov
Release Number: 15-08
SOURCE U.S. Small Business Administration