Sadly, the cap on credit union member business lending is having a negative impact on credit unions’ ability to aid small business.
This was reported in Credit Union Times and CUNA’s NewsNow this week…
Of the more than 1,000 small businesses that applied for funding on Biz2Credit’s online lending platform in July, loan approvals from credit unions are continuing to slow down. The firm analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680.
The firm found that July 2012 loan approval rate of credit unions dipped to 54.6%, down from 55.8% in June. The figure represents the lowest approval rate for credit unions since August 2011, when the figure stood at 54.2%, according to Biz2Credit.
Some credit unions have reported that they had reached their member business lending limit, which currently is 12.25% of their total assets, said Rohit Arora, CEO of Biz2Credit. “While credit union approvals slowed, alternative lenders picked up the slack with their highest approval rating since we began measuring the category,” Arora said in a statement. “Alternative lenders should continue to reap the benefits of capped out credit unions.” [read more]
[related: MBL cap forces down CU small-biz lending: Biz2Credit] (CUNA’s News Now)
Time to take a stand…Contact Sens. Jim Webb and Mark Warner today and ask that they sign on as co-sponsors to S. 2231, legislation that will raise the credit union member business lending cap and help create 5,000 jobs here in the commonwealth!