Every day, I see entrepreneurs and small business owners struggle in this economy. Rising operational costs put them under enormous pressure. They need access to affordable capital, and it’s here that credit unions can make a meaningful difference. As community-focused financial institutions, we are uniquely situated to be one of a small business’s best allies.
The financial challenges small businesses face
Many small business owners tell us they simply don’t have the cash flow to keep up with the economy’s increasing expenses. Their operational costs continue to mount, and they lack the financial cushion to absorb those increases. That difficulty in accessing essential funds can stifle business growth and even threaten a startup’s survival.
Small businesses in this position often hesitate to apply for loans, believing that they won’t qualify. Some assume their businesses are too small, others think their businesses are too risky, and still others think they’re just not the kind of clients banks want. These common misconceptions unnecessarily limit their options, closing doors before businesses even give themselves a chance to knock.
One of the biggest hurdles we see is the misconception that credit institutions only lend for real estate purchases. Many entrepreneurs don’t realize that programs like Small Business Administration (SBA) loans provide opportunities to finance other crucial aspects of their business.
Credit unions offer small businesses a significant advantage here, thanks to our community-focused, personalized approach. Unlike big banks, we take the time to get to know each small business owner. We listen to their unique circumstances and offer creative solutions beyond what traditional lenders provide.
As a credit union, we believe every small business deserves a fair shot at financing, whether it’s for equipment purchases, inventory, or working capital. Helping business owners recognize the full range of financing options is one of our key priorities.
Serving underserved businesses
It’s an unfortunate fact that systemic barriers continue to leave many minority-owned businesses underserved by traditional financial institutions. Credit unions recognize these gaps and actively work to bridge them.
First, we raise awareness about the variety of loan programs available, including SBA loans in particular. These are fantastic resources for early-stage businesses. Whether it’s a 7(a) loan that can support a wide range of business needs, a 504 loan designed for real estate or equipment, or a conventional business loan, these programs provide small businesses with structured financing solutions tailored to their goals.
We then offer financing options and collaborate with organizations to help these businesses access what they need. Together, we work toward the capital and licenses that increase their revenue and strengthen their standing in the community.
Acting as true partners to entrepreneurs
Our goals go far beyond simply providing loans or banking services. We aim to be true partners to entrepreneurs by acting as trusted advisors, which means genuinely listening to each business owner’s story, challenges, and goals, and then providing advice and referrals that align with their needs.
We encourage business owners to build a team of four key partners. This team includes a banker who cares about their success, a CPA, a business attorney, and an insurance agent. As a credit union, we facilitate connections among these professionals to help business owners establish a network that supports sustainable growth.
Financial products paired with education and consulting services empower small business success
Access to capital is crucial for new businesses trying to find their footing. Credit unions and banks often offer specialized SBA loan programs that are ideal for businesses just starting out or looking to expand. We also offer specialized accounts and services designed to accommodate the fluctuating cash flow typical of young companies.
However, our financial products alone aren’t enough to ensure success. After all, running a business is about much more than money. It’s about knowledge.
One of the most powerful tools we can offer our small business members is education, which is why we host networking events and workshops in partnership with local agencies. These forums provide critical insights on everything from financial management to marketing strategies.
The SBA partners with local governments and universities to fund Small Business Development Centers nationwide. These centers are staffed by experienced counselors who offer free or low-cost assistance with business plans, financial projections, licenses, certifications, and more. We collaborate closely with these unsung heroes in our community to provide expert counseling on everything from business plans and financial projections to marketing strategies. By collaborating on joint events, we provide comprehensive support that empowers entrepreneurs with the knowledge and confidence to make informed decisions.
Why we believe in supporting small businesses
Supporting small business owners is a mission for credit unions because we know that when local businesses thrive, the entire community benefits. We invest our time and resources to provide financing paired with guidance.
Credit unions take pride in being financial institutions that treat business owners as neighbors and partners, not just as account numbers. This personalized approach enables us to build trust and foster long-lasting relationships with small business owners.
If you’re a small business owner wondering where to turn for financing and support, consider working with a credit union. You’ll find more than lending solutions. You’ll find real partnership and a community dedicated to your success.
Janet Plummer is the SBA Program Director at DFCU Financial.
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