In January 2012 The Support Center will launch our new and improved blog! Stay tuned for commentary and analysis on current issues, news, and research, as well as advice from our staff experts on small business and mortgage lending.
In the meantime, here’s a sneak peak…
Bank Transfer Day worked! But… now what?
Bank Transfer Day (November 5) was clearly a win for credit unions. The Credit Union National Association, or CUNA, reports impressive surges in credit union membership, new savings, and loans made on that day. In a Washington Post OpEd this weekend, Fred R. Becker, Jr., President of the National Association of Federal Credit Unions, proudly states that “credit unions are no longer the best kept secret in banking.”
But then he rightly asks, now what? And he raises one particularly important concern:
“This victory will be incomplete without the much-needed access to capital that many of those members who own small businesses critically need.”
Becker discusses legislation to increase the lending cap that currently limits the amount of lending that credit unions can do. Sure, this would help expand access. But what about the intermediary loan funds that are already filling this gap by providing small business loans in underserved communities? The Support Center’s Small Business Revolving Loan Program, for example, has worked with our affiliate Community Development Credit Unions (CDCUs) to make $8.2 million in small business loans that led to over 1,000 jobs being created or retained—all in North Carolina’s most distressed communities.
In response to Becker’s question, any next steps must involve these loan funds and CDCUs. And then we have to ask why—despite programs like ours—access to capital persists as the major barrier for small businesses. We can’t expect a broadly shared economic recovery when many of our communities are lagging behind, facing soaring unemployment and deepening poverty. Expanding access to affordable financing for small businesses in these areas is critical, but what are the real barriers? For those who can’t get financing through traditional banks, these lending programs are a lifeline. Getting to the bottom of this issue will be crucial to developing policies and programs that will benefit our most vulnerable communities.