When it comes to finding the best credit union for a small business, there are a few things you need to consider.
First, what type of services are you looking for? Second, what is the size of your business? And third, what is your location?
This blog post will look at the best credit union business accounts for small businesses and loans.
What Are Credit Unions?
Credit unions are cooperative (member-owned), not-for-profit organizations. Whereas traditional banks aim to profit, these credit options make is put back into the organization to improve its services.
All credit union members are part-owners and can vote on the board of volunteers.
Credit Unions Are Not Banks
A credit union’s primary purpose is to provide its members with various financial services at competitive rates.
On the other hand, banks are for-profit institutions that offer a wide range of products and services, including checking and savings accounts, loans, mortgages, and investment products.
Credit Unions Are Open to Eligible Members
These financial institutions are open only to eligible members because they are member-owned and controlled entities. This means that each one has a specific field of membership based on factors such as where you live, work, or worship.
Credit unions’ idea is that people with similar interests or backgrounds should be able to band together and form their own financial institutions.
Credit Unions Are Federally Insured
Credit unions are federally insured, which means that if an institution fails, your deposits are protected up to a certain amount by the Federal Deposit Insurance Corporation (FDIC).
The FDIC is an independent agency of the United States government that insures deposits in banks and savings associations. The FDIC does not guarantee investments such as stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities.
Benefits of Credits Unions
- One of the most significant advantages of most popular credit unions for small businesses is that they often offer loans at much more favorable rates than banks.
- They have no reason to charge unreasonably high-interest rates.
- They are exempt from federal taxes, which means they can pass those savings to their members at lower fees and better rates.
- They often offer more attractive financial tools and perks than banks, they are often more difficult to join.
- Some may require you to work in a specific industry, while others need you to live within a particular area to get a credit union business account.
7 Best Credit Unions for Small Businesses
If you’re interested in becoming a credit union member, finding one that serves small businesses and can meet your needs is crucial.
To help make your search easier, here are five of the best credit unions for small businesses.
First Tech Federal Credit Union
First Tech Federal Credit Union is an institution in California with excellent online banking tools, making monitoring and managing your business’ finances easy.
First Tech offers three business checking accounts: Carefree Checking, HSA Checking, and Dividend Rewards Checking, which offers up to 1.50% APY. There are also three business savings accounts, which offer APYs ranging from 0.05% to 0.20%.
To become a member, you need to:
- Work for an innovative company on their partner list or the State of Oregon.
- Work or live in Lane County, Oregon.
- Belong to the Computer History Museum or Financial Fitness Association.
- If you don’t meet any of the criteria, the institution encourages you to give them a call or stop by a branch to help you navigate.
Digital Federal Credit Union
DCU is a great business checking account for those who want the convenience of unlimited transactions with no monthly fees or minimum balances.
Digital Federal Credit Union is the only Massachusetts-based financial institution offering business owners a free, interest-bearing checking account.
This means you can spend without worrying about maintaining balances or paying monthly fees.
With up to 20 deposits made per day at no cost and an annual yield of 0.10%, it may be worth considering if your company needs access to banking services while saving money in its busy schedule.
If you want to keep your free, high-quality service without too many additional fees or responsibilities weighing down on one account, this option may be perfect for your needs.
America First Credit Union
America First Credit Union might be the most business-friendly option in the nation, thanks mainly to its small business loans.
Small business owners can apply for SBA secured and unsecured lines of credit, SBA auto loans, commercial real estate loans, equipment loans, and more. America First also offers a designated business credit card with customizable rewards.
Additionally, America First is part of the Co-op ATM network—giving customers access to thousands of ATMs.
Also notable, America First offers different savings options, like a money market account, share savings, and dedicated savings. The APYs for the various accounts depend on multiple factors, including account balance, term length, and more.
Eligibility is dependent on where you live and work.
Self-Help Credit Union
Self-Help Credit Union is a solid choice for small businesses with its mission of “creating and protecting ownership economic opportunity all.”
This alternative offers accessible financial tools, including loans up to $250K and term mortgages on commercial properties like warehouses or retail spaces.
To become a member, you’ll need to live, work or worship in an eligible county; meet certain family and employer criteria. If you apply, you can join the Center For Community Self Help with only $5 required.
In addition, the more common SBA 504/ 505 loan programs available from other banks provide financing options explicitly tailored towards your needs – no matter what type you need help starting!
Navy Federal Credit Union
Navy Federal Credit Union (NFCU) offers several excellent services and perks for individuals and small businesses.
NFCU offers five savings options with up to 0.90% APY, loans, business lines of credit, online and mobile banking, and business credit cards with flexible rewards.
As you might’ve guessed by the name, you must be an active service member, veteran, family of a service member, or civilian working for the Department of Defense to qualify for membership at NFCU.
Consumers Credit Union
Illinois-based Consumers Credit Union is a great credit union business account and one of the easiest to be eligible for. You need to pay a one-time $5 fee to join the Consumers Cooperative Association and become eligible to enter here.
Consumers offer a business checking with four tiers. APYs on these accounts range from 0.05% to 0.25%. However, only one savings option for small businesses offers 0.10% APY with a $50 minimum account balance.
This option also offers money market and CD accounts, SBA loans, commercial real estate loans, equipment loans, business lines of credit, etc.
Thanks to the lenient eligibility requirements and variety of business-focused services, this alternative is one of the best credit unions for small businesses.
Alliant Credit Union
Alliant Credit Union, based in Chicago, is one of the country’s most reputable and small business-friendly of these alternatives.
Alliant, unfortunately, does not offer bank accounts designed for small businesses. However, Alliant’s personal bank accounts provide full-featured mobile and online banking options.
These personal accounts can work for small businesses if you avoid commingling your business and personal finances.
Alliant’s high-interest checking offers a competitive 0.25% APY, while the high-interest savings account offers up to 0.75% APY.
Alliant also offers personal loans with great rates and commercial real estate lending.
There are only two physical Alliant branches, but this credit union does have a vast network of ATMs all over the country.
To become a member, these are the requirements:
- Employees & Retirees of select organizations.
- Relatives of existing Alliant members.
- Live or work in a qualifying community.
- If you are not eligible, you can support their partner charity.
Credit Union vs. Bank for Small Business Owners?
Banks are for-profit institutions. As such, they often have higher interest rates on loans, lower APYs on savings accounts, charge a higher monthly fee, and more.
APY stands for Annual Percentage Yield, and it’s the yearly interest rate in a bank account (how much money you earn as a percentage of your current savings).
Pros and Cons of Credit Union vs. Bank
These banking alternatives provide the same services as banks but have different structures. Also, there are a few key advantages that credit unions have over banks.
- They typically offer higher interest rates on savings accounts and lower interest rates on loans.
- They also tend to have fewer fees than banks.
- They often provide better customer service than banks.
There are a few key disadvantages of credit unions as well.
- They typically have fewer branches and ATMs than banks. This can be inconvenient if you need to access your money when you’re not near a credit union branch.
- They also tend to have a smaller staff than banks, so you may not be able to get the same level of personal attention.
How to Choose a Credit Union for Your Business
Knowing which credit union is the best for you is important in identifying the one that offers the best rates and services for your needs. Here is a step by step instructions on how to choose one for your business accounts.
Fees and interest rates
Different accounts are available, so select the one that best suits your needs.
Credit unions typically charge lower fees than banks, so you’ll save money on monthly maintenance fees and ATM withdrawals.
Narrow down your options and chooses two or three options that offer the best rates and services for your needs.
Choosing a credit union with branches near you is important if you have a brick-and-mortar business. This way, you can easily access your account and get your customer service.
When it comes to business banking, customer service is crucial. You want to choose one that is responsive to your needs and offers helpful advice when needed.
Some credit unions have membership requirements, such as being employed by a specific company or living in a particular area. Make sure you understand the needs before you choose one.
Visit the websites or branch locations in-person to learn more about them and decide which one is right for you.
Choosing one option for your small business can be daunting, but it’s essential to research and select the one that best suits your needs.
Check out the credit union’s reputation
Researching the organization and ensuring it has a good reputation is essential.
Choose a member of the National Credit Union Administration (NCUA). The NCUA is a government agency that insures deposits in credit unions, so you can rest assured that your money is safe.
You can check with the Better Business Bureau or other online resources to see if any complaints against an institution.
Top Credit Unions for Business Lending
Small businesses are the backbone of the American economy and need access to capital to grow and thrive. Credit unions offer some of the best small business loans available and stand out when lending to small businesses.
Business loans from these banking alternatives can be great, but it’s important to compare interest rates and terms from multiple lenders before deciding.
- Navy Federal
- Pentagon Federal
- State Employees
- Suncoast Schools Federal
- Tinker Federal
- United Nations Federal
- Western Credit Union
Each credit union offers business loans to small businesses, and they have a proven track record of helping companies grow and succeed.
Benefits of Taking a Business Loan From a Credit Union
One of the most significant benefits of taking a business loan from a credit union is that you’re likely to get a lower interest rate than you would from a bank.
In addition, they often have more flexible eligibility requirements than banks, making them a good option for businesses that may not meet traditional lending criteria.
Another big advantage of borrowing from them is the personal attention you’ll receive from your lender.
People know credit unions for their personalized service, and you can expect to work with a loan officer who understands your business and can help you get the funding you need.
Cons of Business Loans From Credit Unions
One big con is that your interest rate could be higher than if you had gone with a traditional bank.
Credit unions also have different eligibility requirements, so it’s important to research and make sure you qualify before applying.
Finally, getting a business loan from them can take longer than going through a bank. The process is often more complicated and requires more documentation, so be prepared if you choose this option.
Is a Credit Union What you Were Looking for?
These options are fantastic alternatives to banks for many small companies. While you may have to sacrifice ATMs, physical locations, and services, the best credit union for a small business often offers much better loan rates, APYs, and customer service.
But if you realize they are not quite what you need, there are still excellent alternatives for your small business.
Consider applying for a startup business loan with Camino Financial if your business needs additional financial assistance. We offer small business loans with competitive rates, great terms, and low fees.
Is it better to have a business account with a credit union?
Having a business account with a credit union can be better because they often offer more favorable terms and rates than traditional banks. Many credit unions do not charge monthly account fees.
Additionally, they are typically more member-focused than traditional banks.
Can I open a business account at a credit union?
Yes, you can open a business account at a credit union. Most credit unions offer various business account options, including savings accounts, checking accounts, money market accounts, and certificates of deposit.
Which is better for a business, a credit union or a bank?
Every company is different, so it’s important to compare small businesses’ best bank or credit union. Since you may find that some offer more complete services that are better suited to your needs.
Credit unions generally offer better interest rates on loans and deposit products than banks. They also tend to have lower rates in general.
What do I need to open a credit union account?
To open a credit union account, you must provide some personal information, including your name, address, Social Security number, and date of birth.
You may also need to provide proof of identity and proof of residency. The institution will give specific instructions on what you need to bring when you open your account.
What are the best credit unions in the USA?
If you’re looking for the best credit union in the United States, you’ll want to consider factors like financial stability, member satisfaction, and loan options. Among credit unions, Navy Federal Credit Union and Alliant Credit Union stand out as leaders in these areas.
What is the best credit union to use?
There are several great credit unions to choose from, but it depends on what’s important to you. Some people might prefer a credit union with a national presence, while others prefer a more localized one.
Additionally, some people might be looking for one option with low fees or great rates on products like checking and savings accounts, while others might prioritize customer service.
What credit unions offer business accounts?
Some credit unions offer business accounts. More popular credit unions include Navy Federal Credit Union, Westminster Savings Credit Union, and Vancity Credit Union.
Each one has its requirements for opening a business account, so it’s important to do your research beforehand.
To learn more about which in your area offers business accounts, please contact your local Chamber of Commerce or the Small Business Administration.