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Published On: Tue, Apr 3rd, 2018

Credit Union Growth Rises, New York Aims to Offer 500 SMB Loans to Women

Credit union growth is on the rise, as many consumers choose to bank with smaller credit unions over big banks. Growth in Maine has soared by 3% to over 686,000 people banking with credit unions in the state.

Lending volumes are also on the rise, up 7% in 2017 to hit $5.5 billion.

photo/ Public domain pictures via Pixabay

The state’s credit unions now stand at 56 at the end of 2017. Millennials continue to fuel the industry’s growth, with credit unions seen as “an alternative” to traditional financial institutions. The demographics membership in credit unions rose over 10%. Real estate and small business lending also increased, with real estate lending rising 18.3%.

Maine remains one of the country’s top credit union memberships by rate. The state has 53% of the population belonging to a credit union. The Maine Credit Union League was formed in 1938 and is a trade association that all credit unions in the state belong to.

Strong growth in loan products, auto lending and mortgages have fueled credit union growth.

Small business loans are on the rise, with many small businesses turning to credit unions and non-traditional lenders to secure funding.

New York has also announced an initiative to help fund small businesses run by women. New York City plans, through the city’s WE Fund Crowd partnership, to help fund 500 woman-owned small businesses.

The initiative offers small business loans at zero-interest and has helped 40 women since November secure more than $280,000 in loans. Loans are meant to help woman entrepreneurs expand their business.

Borrowers are opting to go to lenders, such as a local credit union or Manhattan Capital, to secure loans with better rates.

WE Fund loans average $5,500 on average, according to the mayor’s office. Minority entrepreneurs account for 80% of the loans dispersed, with 35% being dispersed to immigrants.

“This is about increasing the earning power of women and making sure that women are leading the next generation of home-grown companies,” Mayor Bill de Blasio said.

Women entrepreneurs helped push the WE Fund through expressing their need for access. Women were requesting more access to capital that would allow them to get their businesses started and to expand their operations.

Crowdfunding is also helping to raise money for small businesses, with the city contributing some money and crowdfunding adding additional money. Micro-lenders and the city also helped fund a third location for Massage Williamsburg. The decade-old business received funding from 99 micro-lenders and a large contribution from the city to raise $10,000.

WE Fund plans to provide over 500 loans in the next three years. Entrepreneurs are often forced to take out personal loans to fund their operations, with interest rates ranging from 6% to 36% in some cases. The high interest rates make it too risky for the potential business owner to start their business, leaving many of them abandoning their hopes of being a small business owner.

New York City is helping campaigns get started by pledging to donate the first 10% to WE Fund for women-owned businesses.

Author: Jacob Maslow

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