5 Reasons Credit Unions Are Better For Your Business
I learned the importance of businesses being involved in their community and making a difference from my dad, who owned a small business in Milwaukie, Oregon. That’s why I chose to work in credit unions. As CEO of Oregon’s second largest state-chartered credit union, I love going to work every day and making a difference in the lives of our members, employees, and the communities we serve.
Credit unions focus on serving communities and providing excellent financial services to members. However, we have not effectively shared our story and what sets us apart. Here are some key facts you may find interesting.
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1. Credit unions can make special arrangements during tough times
Many credit unions were started by pioneer member-owners who pooled their funds in a shoebox and began the business in a garage. The focus was always clear: providing credit access to individuals who struggled with obtaining it from traditional banks. Today, there are thousands of credit unions across the country with countless stories of members receiving help from their credit union when facing difficulties.
Even in tough economic times, credit unions understand that "bad things happen to good members." Over the last three years, credit unions have worked diligently to assist members who have lost their jobs, helping them keep their autos and homes. These efforts have provided stability for families during the worst economic downturn since the Great Depression.
At Oregon Community, we assisted over 500 members in 2012 alone with special workout loans, adjusting rates or payments on auto loans and mortgages.
2. You own the place
Credit unions are member-owned, not-for-profit financial cooperatives. When you become a member, you own a piece of the credit union. There are no shareholders or paid board of directors focused on profits. Every decision made by the credit union board and management prioritizes the needs of the membership. Decisions regarding convenience, interest rates, branch locations, technology, products, and services are all made to support the members’ needs. Over a million Oregon residents alone belong to locally owned credit unions, and that number is growing daily.
3. Credit unions give back
Credit unions positively influence the financial services industry in the communities where they operate. Even though credit unions hold a small percent of market share in Oregon, they help control costs and maintain reasonable rates for everyone. Research demonstrates that when credit unions exist in a market, all loan and deposit rates are positively impacted.
In 2012, Oregon credit unions returned over $110 million to their members through lower loan rates, free checking, higher savings rates, and other benefits. On average, this equated to $152 per credit union household. Our members saved this money while still accessing essential services like credit and secure savings. In today’s challenging economic climate, being a credit union member makes financial sense.
4. Credit unions are community supporters
Credit unions have a well-deserved reputation for superior service and being kinder and gentler than traditional financial institutions. However, our community support extends beyond our members. For instance, Oregon Community Credit Union is the largest corporate scholarship sponsor at the University of Oregon, where our membership started. We believe in supporting education and provide scholarships to Oregonians, many of whom are the first in their families to pursue higher education.
In addition to supporting other scholarship programs, Oregon Community also donated over half a million dollars in 2012. Our employees volunteered over 2,000 hours to support numerous nonprofits. These efforts help our members live in vibrant and thriving communities.
5. Big banks favor big loans
New businesses face challenges when seeking loans from large banks in America. A report by Harvard Business School states that large banks approve only 33 percent of loans under $100,000, compared to 60 percent approved by small banks. This information comes from a survey conducted by the FDIC among business owners.
Large banks prioritize sourcing and scaling loans over one million dollars, cross-selling products to customers, and reducing costs through standardized operating procedures and technology. This leads to limited opportunities for startups.
In contrast, credit unions prioritize serving their communities to expand economic activity. They make decisions locally, unlike big banks. Instead of hopping from bank to bank in the hopes of securing a small business loan, consider exploring credit unions in your area. You will find that credit unions may not heavily promote themselves, but they are more likely to provide the loan you need from people who genuinely support you.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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