How credit unions can be a boon for entrepreneurs
Entrepreneurs and small-business owners are often confronted with unique financial challenges, including business accounts, loan worthiness, credit, capital and cash flow issues. “It’s essential for anyone who is starting or running a business to consider the options and do some research before choosing a financial institution,” said Nicole Cypers, Vice President of Public Relations at America First Credit Union. “It’s also important to understand their needs and offer dedicated avenues of support. In many cases, credit unions provide benefits that aren’t available at traditional banks.” Here’s a look at common issues entrepreneurs face, as well as some possible solutions.
Early financial roadblocks for startups
Adequate funding to launch, maintain and eventually expand a business is crucial for its success. “Startups make heavy use of personal equity and traditional debt, with over half using their own personal savings,” the U.S. Small Business Administration Office of Advocacy reported in 2016. While some business owners are willing to risk their personal savings to support their venture, this isn’t viable for all aspiring entrepreneurs.
Others have unreasonable expectations when it comes to funding. “Many in today’s business world have the impression they’ll receive venture capital or angel investment but typically that’s not the case,” Cypers said. According to the SBA Office of Advocacy, venture and angel capital comprise a small part of business financing—less than 2%.
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