Credit Union

The Advanced Guide to the Best Credit Unions for Small Businesses

If you have a small business, the best decision you can make to grow your business is to join a credit union. A credit union refers to a financial institution where members with similar financial targets pull their resources together in a common saving. The best credit union for small businesses should give loans with low-interest rates and long repayment terms.

The most exciting thing with credit unions is that some allow members who are not even related to the union’s original motive. For example, you might find a credit union for farmers allowing even other people with other kinds of businesses to join them. The most crucial thing in a credit union is to ensure that you contribute as per the laid down guidelines.

Credit unions are nonprofit financial institutions, and members keep more of their money. There are usually no monthly fees for the accounts, unlike some banks that charge your bank account’s monthly fees. Therefore, a credit union is a good option for your small business. You will realize that most credit unions do not ask for collateral when giving loans. Your contribution and credit scores speak loud during loan application.

Why is a credit union suitable for small businesses?

Credit unions have various advantages that suit small businesses. People who have been in credit unions can testify that they have seen the following benefits.

i) Higher rates for your savings

Credit unions offer incredibly higher interest rates for your savings. If you compare them with banks, you will realize that keeping money in a bank is a waste of resources. You can get credit unions offering 1% Annual Percentage Yields (APY) or more.

If you save significant amounts in one year, you will have earned a substantial interest on your funds. Moreover, if you decide to save in a CD account for around five years or more, then you will have made a considerable profit by the time you will be withdrawing your money.

ii) Credit unions have lower loan rates

Rarely will you see a credit union charging an APR of more than 10%. Most credit unions operate between 6-9% interest rates. When you compare the rates with those offered by banks, then you will have saved a lot of money in a credit union since banks can even charge 15% APR or more.

The best credit unions for personal loans approve applications within the shortest time possible. Within two days, you have the loan in your account. Credit unions also offer low rates on credit cards given to members. It is all about uplifting the members other than crippling them financially.

iv) Excellent customer service

Credit unions offer excellent services to their members. Remember, the members run the credit unions and thus have a lot of authority over how the institutions run. Therefore, as a member, you can get help online or at a physical branch. Some of these credit unions extend their services even on weekends to ensure that members get services all through. You also find that their social media pages are active 24/7.

How do I join a credit union?

If you are an adult and able to make the periodical contributions, you can become a credit union member. On top of that, you must have a valid government ID such as a passport or a driver’s license. You also need proof of address. You can bring a bank statement or a utility bill such as electricity and water.

With the above, the rest will be easy. It is important to note that even teens and children can join credit unions when they go with their parents or guardians. Some credit unions allow teens to make particular transactions without their parents or guardians.

What does a credit union offer?

Best Credit Unions for Small Businesses

Like banks, credit unions offer various products such as checking accounts, savings accounts, credit cards, debit cards, and personal loans.

Am I responsible for any debt if my partner dies?

If you have a joint account and your partner dies, you are responsible for all the debts. You have to service the loan alone. However, if a person dies and has taken a loan alone, the money they leave behind pays the debts. If it is not enough, then the assets do.

Will I automatically qualify for a loan when I join a credit union?

It is not automatic that you qualify for a personal loan in a credit union. Your scores determine whether you can get a loan or not. Members with credit scores of between 580 to 669 have higher chances of getting loans.

Interestingly, most credit unions offer credit-builder loans that rely on your savings as security to help you grow your scores to the required levels. You pay the loan principal plus interest within a specific term until you finish repaying.

Is it safe to keep money in a credit union?

Money in your credit has insurance from the NCUA up to $250,000. Therefore, in case the credit union collapses, your money is safe. However, you must note that you might not recover the amount on top of $250,000 since it has no insurance.

Before joining a credit union, make sure that the credit union has insurance. In terms of safety for your money, credit unions are equally safe as banks.

Which are the best credit unions for small businesses?

If you have a small business and planning to join a credit union, then the following credit unions are the best.

1) America First Credit Union

america first credit union

America First Credit Union has its headquarters in Utah. It has an elaborate business loan that is suitable for a small business enterprise. There are various kinds of loans you can get at the union, which includes; SBA secured (from $50,000 to $100,000) or unsecured business line of credit (from $15,000 to $50,000)  both the SBA and non-SBA business auto-loans, unsecured capital loans, equipment and machinery loans, business acquisition loans, franchise loans, and commercial real estate loans.

Additionally, you can get a business credit card for your business; giving you cash back rewards that you can utilize for various transactions. You can also customize the rewards to match your business needs. The America First Credit Union business accounts have free online bill pay, E-alerts, and online statements. Members have access to over 30,000 ATMs in the U.S.

2) Navy Federal Credit Union

Navy Federal Credit Union

Navy Federal Credit Union takes position one among the largest credit unions in the country. It is one of the best credit unions for small businesses because of the comprehensive business services.

The union offers two different Navy Federal business credit cards, three business checking accounts, and three savings accounts. The credit union also has six Navy Federal business loans, business processing, management tools, and retirement and business insurance.

Eligible persons must be active servicemen and women, the families of service members, veteran, or civilians working in the Department of Defense. Members can get term loans up to $25,000 and business lines of credit of up to $10,000. Furthermore, members can get two types of rewards business credit cards which have limits of up to $15,000. Interestingly, you will have an online banking platform to pay your bills and other kinds of transactions.

3) Alliant Credit Union

Alliant credit union

Financial experts argue that Alliant is a business-friendly credit union due to its friendly terms regarding loans. The union headquarters are in Chicago and have ATM access all over the country since it participates in the co-op ATM network.

So if you travel from one state to another, you will still be able to access your money. Their personal checking and savings accounts stand out in that the checking account offers 0.45% APY, no minimum balance or monthly fee requirements.

If you opt for e-statements for the savings account, you will earn 1.90% APY with no monthly fees. You only need to deposit at least $5 in your account. You can access mobile and online banking, depending on your preference. You only need to separate your business accounts from any personal bank accounts.

To join Alliant, you only have to enter their charity organization, the Foster Care to Success, and pay $5 to the charity annually. Alliant will automatically pay the amount every year, and you do not have to bother about the contributions. The unsecured personal loans of up to $50,000 make the credit union perfect for small business growth.

4) First Tech Federal Credit Union

First Tech Federal Credit Union

First Tech Federal Credit Union headquarters are in California. The credit union is perfect for online transactions, which are user-friendly and excellent digital banking tools.

The online platform allows you to transfer money to other people either within First Tech Federal Credit Union or other financial institutions.

Using your mobile app, you can pay your bills online, buy goods and services, pay your loans, and view your balance and transaction history. The credit union offers three business savings accounts and two business checking account options.

Furthermore, you do not need to maintain any minimum balance in any account. To join the credit union, you must be a worker in the First Tech sponsor company, work for the Oregon state, work or live in Lane County of Oregon, or be a Computer History Museum or Financial Fitness Association member. If you have a family member working in a First Tech sponsor company, you can join the credit union. The credit union has over 30,000 ATMs and around 40 physical branches.

5) Consumers Credit Union

consumers credit union

Consumers are an Illinois-based credit union that is suitable for small businesses. Eligibility criteria are also simple as you only need to be a member of the Consumers Cooperative Association, whereby you pay a one-time membership fee of $5. You also need to open a membership account and deposit at least $5.

There are no limitations on the place of residence as it applies to many other credit unions.  At the Consumers Credit Union, you can open a business checking account that accommodates high-volume transactions.

Since the account operations are online, you will access online banking, online bill pay, and e-statements. Furthermore, you can get a Visa business credit card (with no fee) and any of their three different business savings accounts. Above all, you can open a Business Money Market account and deposit at least $500 to earn high rates.

6) Self-Help Credit Union

Self-Help Credit Union

As the name depicts, the credit union is strongly dedicated to uplift its members financially. The credit union offers accessible financial tools for small businesses. Self-Help’s small business loan is a significant boost to small businesses as one can get loans of up to $250,000. Members can get recovery loans for businesses hit by Hurricane Matthew.

Furthermore, you can get various accounts for your business, such as term savings, certificates, and Money Market accounts. If you become a member of the Center for Community Self-Help with a $5 fee, you can join the credit union. There are other eligibility criteria as well.

7) Digital Federal Credit Union

Digital Federal Credit Union

I chose this credit union because of its equity crowd funding feature that helps members invest in the community businesses. As a member, you will benefit from your business’s financial tools that will see you drive your business enterprise to the next level.

Also, you can benefit from checking and savings accounts, business lines of credit, and credit cards. Furthermore, you can have a business checking account with no minimum balance or maintenance fee.

As a member, you can open the Premier Business Checking account and earn interest with time. Get a business line of credit of up to $3 million. Commercial mortgages are up to $5 million.

8) Boeing Employees Credit Union

Boeing Employees Credit Union

Boeing Employees Credit Union started in 1935 to uplift Boeing employees financially. If you live in Washington State, work in Oregon County, Idaho County, and select organizations, you are eligible to apply and become a member. You will benefit from an excellent business banking programs.

Also, you can open any of the business checking accounts with no monthly fee. As a member, you can get any of the two business credit cards with no fees and earn cash back where applicable. You can get business loans of up to $250,000.

Bottom line

Credit unions are fantastic financial institutions that can help you to grow your business to greater heights. You can get business loans to expand your enterprise to make more profits. Even though some credit unions have restrictions on eligibility, others are open to willing persons to join. Credit unions offer low-interest loans, checking accounts, saving accounts, credit cards, and debit cards. You can save with a credit union and get high APYs.

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