A best-kept financial secret revealed
One of the best-kept financial secrets is that credit unions offer business services. According to the National Credit Union Association, business loans and unfunded commitments at federally insured credit unions grew from $13.4 billion in 2004 to $51.7 billion in 2014, an annualized growth rate of 14 percent, and that trend is continuing to move up.
Already known for great service, NuMark Credit Union offers lower fees and better interest rates to their members. Their expertise also extends to business services including revolving lines of credit, commercial mortgages, term loans for equipment, business and professional practice acquisitions and much more.
NuMark Credit Union is different from a bank in a number of important ways. At the credit union, you are a member, not just a customer. Credit unions focus on creating value for their members. Business Owners who bank at a credit union usually pay fewer fees and they are able to earn interest on their business checking account.
As for choosing a financial service provider, business owners have many choices available. As of early 2014, nearly one in five small-business borrowers sought financing from an online lender, according to a survey by the Federal Reserve. It is estimated that 80 percent of small business owners go online first to search for a loan, and that percentage is expected to grow in 2016.
While these lending options may sound like fast, easy solutions, we caution our members to be certain that they fully understand what is involved. Online lending rates are often considerably higher and have fees or restrictions that can be a burden. While you may get approval in 2 hours, you may also be paying a rate of 15 percent or higher.
Another trend in small business lending involves larger banks, and the movement to centralized processing and servicing.
If your loan is under a certain dollar amount, you may not have a loan officer assigned to work with you. Instead, you will be working through an 800 number and email. Local credit unions are able to sit down and collaborate with small business borrowers to offer their advice and expertise.
In addition to standard lending products, the SBA 7a and SBA 504 programs offer real value to businesses. These programs are a good choice for many financing purposes such as owner - occupied, real estate purchases, business acquisitions or even for the buyout of a business partner.
Many business owners use these loans to purchase new equipment or provide for their temporary working capital needs.
Working with a trusted lender means that you will have a knowledgeable partner to assist you through the process.
When it comes to your business, you know what you need to succeed. When it comes to securing money to grow your business, be sure to explore all your options. Your financial institution of choice is always the best place to start. With rates on the rise, you should plan to start the loan process early to secure your best financing solution.
There are many financial resources available both online and in your local area. Be sure to explore fully all of your options. Most importantly, be sure to choose a lender you trust who will understand your needs and fully explain the process to you.
• Ron Graham is executive vice president of Spectrum Business Resources LLC.