May 2019
Commercial Lending
NCUA/SBA Partnership Aims to Help Credit Unions Better Support Small Businesses

The National Credit Union Administration (NCUA) and the Small Business Administration (SBA) recently launched a 3-year collaborative effort to bring small businesses and credit unions together and expand awareness about SBA loan programs.

The NCUA and SBA have signed a memorandum of understanding to help credit unions make better use of SBA backed loans and resources.The NCUA and SBA have signed a memorandum of understanding to undertake a series of initiatives that will help credit unions better understand and make use of SBA backed loans and resources.  These joint initiatives may include webinars, training events and media outreach.

NCUA Board Chairman Rodney E. Hood said the announcement’ provides an “opportunity to highlight SBA-guaranteed loans as another tool for credit unions to support small businesses and foster economic growth in their communities.”

“Credit unions are well-situated to understand and work with their local businesses and entrepreneurs to extend affordable credit,” he said.

Fewer than 1 in 10 credit unions participate in the SBA’s guaranteed lending programs, with credit unions holding less than 2% of the $132.3 billion in outstanding SBA guaranteed loans as of March 31.

Credit unions held 6,532 SBA commercial loans worth $2.1 billion as of Dec. 31, 2018, up 15.2% from a year earlier. The average SBA loan was about $316,000, with SBA guaranteeing about 58% of the principal.

SBA lending is typically an activity of larger credit unions.

The median asset size for the 415 credit unions offering SBA commercial loans was $572 million at the end of 2018, compared with $125 million for the 1,487 credit unions that held commercial loans but no SBA loans.

Among the SBA lenders, commercial loans made up 9.1% of total loans, and SBA loans made up 4.8% of their commercial portfolio.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at  Phone: 850.681.3601 or toll-free at 800.504.LOAN.