Credit Unions Got High Marks from Small Business Borrowers During COVID
In 2020, the SBA disbursed more than three times as many funds in the COVID-19 EIDL programs as it had for all disasters combined in the Agency’s 67-year history, with most small-business loans in the form of Paycheck Protection Loans (PPP).
In the midst of this frenzy, lenders fared quite differently in terms of customer satisfaction. Banking Dive recently summarized the findings of a Federal Reserve small-business credit survey released in early 2021. The SBA canvassed 15,000 businesses, 91% of which applied for emergency funding during the pandemic.
About 87% of small businesses that applied for a loan, a line of credit or a cash advance with a credit union were satisfied. Online lenders, however, found themselves at the bottom of the heap for customer satisfaction.
One might extrapolate the reason for the disparity is due to credit unions being perceived as beacons of personalized service vs. the faceless customer experience online. This perceptual difference is likely to become magnified during times of crisis. It’s not a leap to think that how credit unions, small and large banks and online lenders shepherded the process will have lasting impact on customer perceptions.
The article also explores the survey’s data on the overall impact of the pandemic on small business, how it particularly impacted minority-owned businesses and the lending and debt picture moving forward.