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Compare credit union business loans

Are these nonprofit lenders right for your small business?

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Fact checked

Credit unions are nonprofit financial institutions owned by their members. With lower overhead costs than banks and other for-profit lenders, credit unions often offer some of the most affordable rates and terms out there.These are typically small operations with a limited capacity to serve and fund. Membership is often limited to a few states, and many don’t even serve businesses. Those that do often only offer financing up to $50,000 and require a lengthy application that you usually can’t fill out online.

But if you’re looking to save, don’t need money right away or just need a small amount, a credit union could be a right fit.

Compare 7 credit union business loans

11% to 18%

$2,500 to $25,000

Up to 5 years

2.96% to 10.76%

$10,000 to $250,000

Up to 7 years

6.15% to 10.15%

$500 to $25,000

Up to 6 years

5% to 7%

Up to $50,000

Up to 20 years

Starting at 1.5%

Starting $50,000

Varies

Up to

Up to $15,000

Up to 5 years

Up to 18%

Varies

Varies

Navy Federal Credit Union unsecured business loans

Not stated
Min. Credit Score
11%
Starting APR
$25,000
Loan Amount

Provided your business has at least $10,000 in eligible assets, you may qualify for a business loan through Boeing Employees’ Credit Union (BECU). It offers secured term loans up to $250,000 — large for a credit union — and has a few other business financing options if you can’t provide security. But its application requires multiple documents and information about your business, which can make applying a tedious task.

  • Maximum loan amount of $100,000
  • Known for personalized service
  • Maximum APR of 18%
  • All owners with at least a 20% stake must join Navy FCU
  • High starting APR of 11%
  • May charge an origination fee
Min. Loan Amount $2,500
Max. Loan Amount $25,000
Interest Rate Type Fixed
Maximum Loan Term 60 months

Navy Federal Credit Union unsecured business loans: BECU business term loans

Not stated
Min. Credit Score
4.02%
Starting APR
$250,000
Loan Amount

Provided your business has at least $10,000 in eligible assets, you may qualify for a business loan through Boeing Employees’ Credit Union (BECU). It offers secured term loans up to $250,000 — large for a credit union — and has a few other business financing options if you can’t provide security. But its application requires multiple documents and information about your business, which can make applying a tedious task.

  • Low starting APR of 4.02%
  • Large maximum loan amount of $250,000
  • No origination or application fees
  • No unsecured term loan option
  • Long application process
  • Can’t apply or join online
Min. Loan Amount $10,000
Max. Loan Amount $250,000
Fee None
Interest Rate Type Fixed
Minimum Loan Term 12 months
Maximum Loan Term 84 months

Sound Credit Union business loans

Not stated
Min. Credit Score
6.15%
Starting APR
$25,000
Loan Amount

With loans starting as low as $500 and APRs ranging from 6.15% to 10.15%, Sound Credit Union offers one of the most competitive deals out there. And there are no fees — not even late fees. The downside: It’s only available in Washington State. Businesses also must be at least two years old, and owners need a credit score of at least 700 to qualify.

  • No minimum revenue requirement
  • No origination, prepayment or late fees
  • Online application available
  • Low maximum loan amount of $25,000
  • Mostly limited to Washington-based businesses
  • Membership required
Min. Loan Amount $500
Max. Loan Amount $25,000
Interest Rate Type Fixed
Maximum Loan Term 72 months

Lake Michigan Credit Union business loans

700
Min. Credit Score
5%
Starting APR
$50,000
Loan Amount

Lake Michigan Credit Union might only have locations in Michigan and Florida, but its business loans are available nationwide. It offers secured term loans with rates that max out at 7% — several points below where APRs start at other credit unions. Business owners need to have good credit and enough collateral to back the amount you need to borrow.

  • Competitive APRs cap out at 7%
  • Available in all 50 states
  • No origination fee
  • Must secure the loan with collateral
  • No online application
  • Loans max out at $50,000
Max. Loan Amount $50,000
Interest Rate Type Fixed
Min. Credit Score 700
Maximum Loan Term 240 months

Consumers Credit Union business lines of credit

Not stated
Min. Credit Score
1.5%
Starting APR

Loan Amount

Consumers Credit Union doesn’t have a term loan option like the others credit unions on our list, but it does have an unsecured line of credit. Because it’s revolving, you can pay back what you borrow and re-borrow the funds as you need them. But there’s a $100 annual fee each year you have your line open — something you won’t typically pay with a term loan.

  • Extremely low starting APR of 1.5%
  • Secured and unsecured lines available
  • Lines start at $50,000 — and have no set maximum
  • Limited to businesses based in Illinois or Wisconsin
  • $100 annual fee
  • No online application
Min. Loan Amount $50,000
APR Starting at 1.5%
Interest Rate Type Fixed

America First Credit Union business loans

Not stated
Min. Credit Score
18%
Starting APR
$15,000
Loan Amount

American First offers simple business loans with no minimum amount and a quick approval turnaround. But it only serves businesses in Utah, Nevada, Arizona and Idaho. And while its rates are capped at the standard 18% APR for credit unions, it’s not clear where they start.

  • No minimum loan amount
  • Works with SBA lenders
  • Competitive rates
  • Loans capped at $15,000
  • Limited to businesses located in 4 states
  • Not up front about where rates start
Max. Loan Amount $15,000
APR Up to
Interest Rate Type Fixed
Maximum Loan Term 60 months

Northwest FCU business loans

680
Min. Credit Score
18%
Starting APR

Loan Amount

Northwest FCU offers loans to businesses in all 50 states — and they’re available to startups, too. While its loans start at $50,000, there’s no cap to how much you can borrow. But you must have a personal credit score of at least 680 and may need to provide collateral for larger loans. It also charges a one-time application fee of around $250.

  • Borrow as much as you need
  • Available in all 50 states
  • Open to startups
  • Low customer ratings
  • Branches only located in Virginia
  • Application fee of around $250
APR Up to 18%
Interest Rate Type Fixed
Min. Credit Score 680

How do credit union business loans differ from other business loans?

The main difference between credit union business loans and other types of business financing is the application process. Credit unions require all businesses to become members either before or during the application process, which typically involves opening a business checking or savings account. Membership is often limited to a few states or industries and can sometimes be more difficult to qualify for than the loan itself.

Another factor that sets credit unions apart is the cost. Because they’re nonprofit lenders, credit unions can often offer more competitive rates and terms than you might find elsewhere. In fact, the National Credit Union Administration doesn’t allow federal credit unions to charge interest above 18% on any loan products, including business loans. Many credit union business loans also don’t have any application or origination fees, which come standard with most other types of business financing.

But they’re not without some downsides. Credit unions are notorious for being mismanaged, and getting a business loan can take a lot of time. They often don’t invest as much in technology or customer service as other lenders, and many don’t even have an online application. And since they’re such small operations, credit unions usually don’t have the reserves to fund large projects.

Benefits of getting a business loan from a credit union

  • Highly competitive rates. Federal credit unions legally can’t charge more than 18% interest on their loans, and many others charge even less.
  • Fewer fees. Credit unions often charge fewer origination and application fees than banks or online lenders. Some don’t even charge late or prepayment penalties.
  • Affordable small-dollar financing. Looking for a loan under $5,000 without astronomical rates? A credit union could be your best bet.
  • Membership perks. Many credit unions offer workshops and other free resources for members that could help you better run your small business.
  • Faster than a bank. While many credit unions probably can’t get your business next-day financing, they typically have a faster turnaround time than borrowing from a bank.
  • Supporting your community. Most credit unions are local organizations that serve the community around you. Borrowing from one is an easy way to give back and empower others to do the same.

Are there any drawbacks?

  • Low-tech institutions. Credit unions often don’t invest much in their websites or other technology, making for slow applications and glitchy apps.
  • Hard to qualify. Many credit unions only work with businesses that have been around for a couple of years and business owners with good to excellent credit.
  • Large amounts hard to come by. Many credit unions just don’t have the resources to fund projects over $50,000.
  • Complicated applications. If you’re not already a member, your business typically has to fill out two applications to apply for financing: one for membership and one for the loan. And these can be highly detailed.
  • Poor customer service. One of the top customer complaints against credit unions is the quality of customer service. It can often be hard to get in touch with a representative or correct a mistake.

Compare online business loans you can apply for today

Data indicated here is updated regularly

Name Product Filter Values Loan amount APR Requirements
First Down Funding business loans
$5,000 – $300,000
Fee Based
At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 400
Alternative financing up to $300K with highly competitive rates.
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
ROK Financial business loans
$10,000 – $5,000,000
Varies
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.
OnDeck small business loans
$5,000 – $250,000
As low as 9.99%
600+ personal credit score, 1 year in business, $100,000+ annual revenue
A leading online business lender offering flexible financing at competitive fixed rates.
Rapid Finance small business loans
$5,000 – $1,000,000
Fee based
Steady flow of credit card sales, bad credit OK
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How to get a business loan from a credit union

Ready to get financing through a credit union? Follow these steps to compare lenders and find a loan that fits your business’s needs.

  1. Know what you’re looking for. How much money does your business need to borrow? Do you want to back your loan with collateral? Are you willing to pay a little extra to save time on the application? Knowing your priorities before you start your research can help you make a faster comparison.
  2. Do your research. Try to find a credit union that serves businesses in your area that matches your criteria. Since credit unions are often regional, your options are likely very different from what’s available to a business across the country.
  3. Stop by or give them a call. There’s a high chance you won’t be able to find all of the information you need on the credit union’s website. Calling customer service or stopping by a local branch might be the only way to find out if your business is eligible for membership and financing.
  4. Become a member. While many credit unions allow you to submit your membership and business loan application at the same time, some may ask you to become a member first.
  5. Gather your documents. Once you’ve settled on a credit union, having all of the documents and information you need on hand can seriously speed up the application process.
  6. Complete and submit the application. How the application actually works varies between credit unions. Some have a quick online form, while others might ask you to set up an appointment to apply in person.
  7. Review and sign your offer. The turnaround time at credit unions is typically faster than a bank, but slower than an online lender. Once you get your offer, read it carefully to make sure it’s the right fit for your business before signing any loan documents.

How do I join a credit union?

The process of becoming a business member differs between credit unions. Some require business owners to become individual members to open a business account. Others have separate, business-specific requirements that might be limited by location or industry.

Many credit unions don’t mention how business membership works on their websites, so you might need to call or visit your local branch to learn more. Generally, becoming a member involves opening up some kind of business account and depositing around $25. You can often apply to become a member along with your loan, though some credit unions require businesses to join first.

Bottom line

Credit union business loans are a good fit for established businesses looking for loans under $50,000 with competitive rates. However, they’re not ideal if you need money fast or want to fund a large project.

To learn about your other business financing options, check out our comprehensive guide to business loans.

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