Credit unions look to boost small business lending

3/9/2011

With the economy still on the mend, one of the biggest challenges for small business owners is acquiring the funds necessary to remain operational. Credit unions are now trying to help these companies by improving small business lending practices with the aid of the federal government, the Wall Street Journal reports.

In today's economic climate, credit unions' commercial loans for small businesses are limited to 12.25 percent of assets as the result of an old law from 1998. However, Colorado Democrat Senator Mark Udall is hoping to more than double the amount credit unions can lend to small businesses to 25 percent through new legislation he intends to file later this week.

"It's one of the few easy ways that we have to support credit unions, small businesses and help create jobs all at once," Udall told the source.

Some community banks have traditionally been opposed to such propositions, as they enable tax-advantaged credit unions to take potential business away from smaller community banks.

The welfare of small businesses impacts the economy of the entire country, so any movement that would benefit these organizations would go a long way to improving the economy as a whole.