How Credit Unions Can Grow their Small Business Membership – And Revenue

By NewtekOne

March, 2023

Small businesses are a remarkably resilient segment of the economy, enduring the unprecedented challenges of recent years. Despite the impact of the pandemic and the continued pressures of inflation, small business growth is expected to continue into 2023.

In fact, according to Bank of America, two-thirds of small business owners anticipate increased revenues, more than half plan to expand, and over 80% expect to obtain financing for their business in 2023.

Credit unions across the country can be a valued resource and partner to these small businesses – helping their communities and growing their bottom line.

For example, CU Times* reports that credit union business lending grew by over 20% in 2022. However, credit unions still hold less than 1% of the total U.S. business loan portfolio, indicating that the upside potential remains enormous for credit unions to tap into this audience.

So how can credit unions attract and grow their business membership? Here are a few areas to consider:

Lending operations

As noted above, business financing will continue to be a hot-button topic for business owners in 2023, especially amid an economic slowdown. Credit unions can play a significant role in providing funding for a variety of business needs, from working capital to refinancing existing debt.

And even if your credit union doesn’t have the resources or appetite to scale a lending program, you can partner with a Lending Service Provider (LSP) to outsource some or all of your lending operations. Many CUSO’s who profess they can handle small business lending actually have a difficult time with its highly specialized nuances, such as the 1,600-page policy and procedure manual required for SBA loans.

To ensure your credit union is set up for success, it’s critical to choose an LSP provider with the track record, expertise, and resources for small business lending – not an organization that specializes in home equity, auto loans, or other consumer products.

Comprehensive business solutions

Beyond lending, credit unions can offer a variety of other critical business services to their members that directly impact their bottom line. For example, payment processing, payroll and benefits, insurance, web hosting, and IT are all vital to a business’s health – and can be both operationally and financially challenging for a small business owner to manage day-to-day.

Credit unions that can provide cost-effective, turnkey solutions in these core areas will build stronger member relationships and establish incremental revenue streams for their institution.

Marketing & branding

Credit unions might assume that only a limited portion of their membership owns or operates a small business. However, according to Oberlo, nearly half (46%) of the U.S. workforce is employed by a small business, meaning it could be more likely than you realize that your members either run a business or know someone who does.

When your members are seeking information about business services, your credit union needs to be top-of-mind. That’s why it’s crucial to promote business solutions on your website, in marketing efforts, and in daily conversations between staff and members. 

* Subscription may be needed.

About NewtekOne

Businesses expect more and NewtekOne (NASDAQ: NEWT) delivers core solutions that help businesses grow. As a partner, NewtekOne provides SBA lending services, business financing, merchant processing, payroll, insurance and website/technology services that credit unions can offer to members.