The Entrepreneurial Connection between Credit Unions and Businesses
By the aftermath of 2008’s financial crisis, the Big Banks had considerably strained their relationships with small business owners by denying funding and turning a blind eye to their needs. Fast forward to the present, and the new ally of small businesses and entrepreneurs in today’s economy is credit unions.
In times of economic hardship, credit unions have always acted as the support system for businesses large and small. Most recently, the support lent by credit unions helped to financially stabilize many local businesses in Ontario, which ultimately helped the economy to recover and diversify.
Similar to banks, credit unions have a team of business experts to help provide solutions for both cash management and commercial lending. Unlike the banks however, credit union employees are committed to supporting entrepreneurs by helping them expand their business financially. Like the ebb and flow of the economy, credit unions understand that their business members will experience financial ups and downs of their own, and rely on local decision-making to do what’s best for them. Through good times and bad, credit unions are there for local business.
Credit Unions Empower Female Entrepreneurs
When compared to male entrepreneurs, women often face more challenges when it comes to acquiring funds to start their business. However, this discrimination isn’t just limited to the banks. A Harvard Business Review article reported that male and female entrepreneurs often get asked entirely different questions by venture capitalists. These questions directly affect how much funding they get, with males ultimately receiving around seven times the funding that females receive (with comparable businesses).
An alternative to both banks and venture capital, credit unions have emerged as a much-needed ally for all entrepreneurs. In addition to the initial start-up capital, credit unions offer business coaching to help support and assist their members in launching their new enterprise. These programs range from workshops on how to improve your business skills, to microloan funding for new ideas – including social enterprises aimed at making the world a better place.
The Relationship Between Credit Unions and Freelancers
When it comes to banking, it’s no secret that freelancers are usually subject to many more hoops and hassles than your typical nine-to- fiver. Many freelancers describe their banking experiences as aggravating, especially when it comes to applying for a mortgage or other loan. Self-employed professionals often overlook the option of becoming a credit union member, simply because they don’t know much about it.
Intuit Canada estimates that 45% of Canadians will be self-employed, freelancers or independent contractors by 2020. Furthermore, Statistics Canada stated that in 2016,1.9 million Canadians were entrepreneurs, with most in freelance positions in healthcare, graphic design, writing, and education. Banks are apt to view these people as having inconsistent incomes, and label them as a risk to their bottom line. Conversely, credit unions take pride in serving people with such a vast array of skills and talents. They don’t view these people as a liability, but as an asset.
Start-ups Can Depend on Credit Unions
A start-up usually has control over their business decisions in comparison to those working with a venture incubator for financing. In these relationships, executives provide financing in exchange for equity in the company, and often determine how your business will operate.
Credit unions operate under an entirely different cooperative business model. Whether you have $10 or $100,000 in your account, all members have equal shares in their credit union, and are treated as such. In this model, start-ups have a stake in their credit union, instead of the other way around. With an emphasis on financial literacy, staff members are committed to providing best-in- class customer service, and tailor their products and services to meet the specific financial needs of your business – a welcome departure from the limited financial instruments available to you elsewhere.
Credit Unions Can Take Your Business to the Next Level
A credit union isn’t just a place to park your money. They can play a crucial role in helping your business improve or expand. Some of the things a credit union can help you with include:
- Creating a business plan
- Describing legal issues new businesses face
- Incorporating a new business
- Weighing the pros and cons of having a home office business
- Workshopping how to successfully hire employees
- Consulting on expansion plans and financing options
Most people think that a bank is their only option to improve or establish financial support to turn their entrepreneurial dreams into reality. This is simply not the case. Credit unions focus on building community through their support for local businesses. These businesses go on to provide quality products, services, and create jobs in the communities they serve. Everybody benefits.
Do you have an innovative idea to share with the world? Step into your local credit union, and get the financial support that you deserve.