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One of the most important decisions you’ll make as a small business owner is finding a hub for your business’s finances. Whether you need to open a business bank account, apply for a loan, find a credit card, or simply consult an expert for financial advice, you should feel confident that your financial institution can provide an answer for most (if not all) of your small business’s needs. This being said, if you’re searching for the right financial institution and you find that you’re disenchanted by the prospect of patronizing a big bank, you should know that you have other options—instead, you can look into the best credit unions for small business owners.
Business-friendly credit unions are a compelling alternative to banks because of their personalized customer service and dedication to providing their members with the most affordable financial tools possible. Plus, these days, it’s not difficult to find business-friendly credit unions that offer financing tools specifically for their entrepreneurial members, including loans, credit cards, checking and savings accounts, insurance, retirement funds, and health savings accounts—all designed particularly to accommodate small business owners.
Is a credit union the right option for your small business? We’re here to help. First, we’ll discuss the differences between credit unions and banks and why you might opt for a credit union for your small business banking. Then, we’ll break down our picks for the best credit unions for small business—so you’ll know exactly where to start your search.
If you’re looking for a credit union for small business banking, it’s likely you already know what a credit union is, at least in a general sense.
In essence, like a bank, a credit union is a financial institution that offers a range of products—bank accounts, credit cards, loans, etc. This being said, just like any of the best banks for small business, there are certain credit unions that provide a wider variety of high-quality products designed specifically for business owners.
On the whole, some of the advantages of credit unions typically include more-personalized customer service, higher interest rates on checking and savings accounts, lower interest rates on loans, and low fees. However, there are some important characteristics to keep in mind that distinguish a credit union from a bank.
Let’s break them down:
To begin, one of the biggest differentiators between credit unions and banks is that the former are not-for-profit, and the latter are definitively for profit.
Not-for-profit means exactly as the name suggests: These institutions don’t operate in order to make a profit for their owners. Rather, all the money they earn is put right back into their operations. Therefore, since credit unions are cooperative their not-for-profit structure means that one member’s deposit might become another member’s loan. For many, this mutually supportive system is a major tipping point in credit unions’ favor.
Moreover, the not-for-profit structure of credit unions is beneficial for members, including small business owners, who are seeking loans. Because credit unions don’t issue small business loans or other financial products in order to turn a profit— as a traditional bank or alternative lender would—their interest and savings rates are lower and they have fewer fees.
If you can secure a short-term loan from a business-friendly credit union, for example, the loan you receive will likely have much lower rates than you would find with an alternative lender, or perhaps even a bank. Plus, although you’ll still need to meet stringent criteria to be eligible for a business loan from your credit union, the approval process might be faster than it would be at a bank—since there’s generally less red tape involved in a credit union’s underwriting process.
Next, another major distinction between banks and credit unions is that credit unions are member-owned. Whereas banks are essentially profit-driven corporations, credit unions are entirely community-driven, right down to their owners and the way they operate. Therefore, in a credit union, members are also part-owners, and they vote on a board of volunteers as managers.
The participation and transparency of a member-owned organization may be another reason you decide to look into the best credit unions for small business owners, as opposed to traditional banks. Ultimately, because credit unions are inherently relationship-driven, they may provide even better and more personalized customer service than a large bank can, as well as educational services and other benefits for their members.
Thus far, we’ve talked about the members that make up a credit union, but, unlike in a traditional bank, you must meet certain requirements to be eligible to join a credit union and become a member. Different credit unions will have different requirements for member-eligibility and some will be more exclusive than others.
Depending on the credit union in question, you may be able (or unable) to join based on your:
For example, if you’re looking into Navy Federal business accounts, you must be an active member of the military, a veteran, or a department of defense employee in order to be able to join this credit union. This being said, however, just because there are eligibility requirements involved doesn’t mean you won’t be able to explore the best credit unions for small business and find one that works for you.
With these three differences between credit unions and banks in mind, let’s discuss an important distinction between two types of credit unions.
There’s a difference between federal credit unions and non-federal (aka state-chartered) credit unions—and this difference boils down to how they’re insured and regulated. The vast majority of credit unions are federal, which means they’re regulated by the National Credit Union Administration (NCUA) and backed by the National Credit Union Share Insurance Fund (NCUSIF). As you may have surmised, non-federal credit unions, on the other hand, are not regulated or insured by these government agencies. Non-federal credit unions are privately insured.
You’ll be able to determine whether a credit union is federally backed by the following characteristics:
Additionally, the NCUA organizes credit unions into further subcategories beyond these two distinctions, according to their membership types. Therefore, credit unions may be defined as community, educational, military, or service industry corporate credit unions, among other types.
Although it’s important to understand the distinction between these two types of credit unions, the difference may not really play a role as you explore the best credit unions for small business owners. At the end of the day, even though federal credit unions are subject to maximum interest rate regulations, both federal and non-federal credit unions will offer you the same types of business financial products.
Finally, considering everything we’ve explained so far, we once again have to emphasize: Credit unions are not banks.
With this distinction in mind, then, for all the possible benefits of choosing to work with one of the best credit unions for small business, you’ll want to be fully aware of the potential downsides of a credit union business account as well—and why you would decide to direct your search toward a traditional bank instead.
Therefore, although credit unions generally offer a similar selection of financial tools as banks, banks usually have more rewards programs, credit card options, and digital tools (like online and mobile bill pay and expense tracking) than credit unions, as well as many more local branches and ATMs. Moreover, even though credit union business loans typically carry low-interest rates and fees, you might see similarly competitive rates in a loan from a small local bank. Plus, certain credit unions may not even offer business loans or business-specific bank accounts at all.
This being said, as you consider the possibility of a housing your finances in a credit union business account—instead of a traditional business bank account—you’ll want to think about how heavily you prioritize online banking capabilities, accessibility to physical locations and ATMs, and a personal relationship with your financial institution.
Now that we’ve discussed the significant differences between credit unions and banks, let’s explore some of the best credit unions for small business owners.
As you’ll see, we selected these eight credit unions based on their impressive array of business-specific offerings, accessible membership criteria, and technological innovation. Therefore, any of these options might be able to offer you the credit union business account, credit card, or loan that you need. Some of these options are among the best credit unions for small business checking accounts, whereas some top the list for their accessibility.
The first option on our list of the best credit unions for small business, America First Credit Union, stands out for, among other products, their business loan program.
This Utah-headquartered credit union offers a business loan program that is just as extensive as you’d find at a traditional bank, entrepreneur members can apply for: an SBA secured or unsecured business line of credit, both SBA and non-SBA business auto loans, equipment and machinery loans, unsecured capital loans, business acquisition loans and franchise loans, as well as commercial real estate loans.
Unlike many other credit unions, America First also offers a dedicated business credit card, whose cash back or rewards earnings you can customize according to your business’s needs. Additionally, business owners can choose among four business checking account options (including a non-profit specific option), three business savings account options—including a health savings account for employers—and five business certificate account options. Moreover, the America First Credit Union business accounts include free online bill pay, online statements, and E-alerts as well.
Compared to other credit unions, America First’s membership eligibility is a little more constrained—as it’s largely limited to where you live or work. This being said, it’s also important to note that America First only operates in a handful of states, but its participation in co-operative banking means members do have access to nearly 30,000 ATMs within the U.S.
The second option on our list of business-friendly credit unions is Alliant.
Based in Chicago, Alliant Credit Union only has two physical branch locations, but like America First, their participation in the co-op ATM network means that members have access to thousands of ATMs across the country.
This being said, other than commercial real estate lending, Alliant doesn’t offer many business-specific financial products, however, their personal checkings and savings account are still worth considering. First, Alliant offers a high-rate checking option, with a 0.45% APY, no monthly service fee, and no minimum balance requirements. Additionally, Alliant offers a high-yield savings account with an impressive 1.90% APY, no monthly fee (if you opt for e-statements), and a low $5 minimum deposit.
Moreover, all of the Alliant Credit Union accounts include both mobile and online banking. Therefore, as long as your diligently separating your business and personal finances, these personal bank accounts may be worthy options for your business’s needs.
Plus, gaining membership to Alliant is very accessible—if you don’t meet their general membership qualifications, you can become a member of their partner charity, Foster Care to Success, and then you’ll be eligible to join Alliant. In this case, Alliant will pay a $5 annual membership fee to the charity on your behalf.
Navy Federal Credit Union—or NFCU— is the next option on our list of the best credit unions for small business, and it happens to be the largest credit union in the nation. On top of their wide array of financial tools for families and individuals, NFCU also offers a fairly comprehensive suite of business services.
In particular, they offer three business checking accounts, three savings accounts, as well as two different Navy Federal business credit cards. In addition, NFCU offers retirement and business insurance, merchant processing systems, business management tools, and six types of Navy Federal business loans.
To be eligible for NFCU membership, you’ll need to be an active service member, veteran, family of an armed service member, or a civilian working for the Department of Defense.
If you’re looking for a business-friendly credit union with comprehensive and user-friendly online and digital banking tools, in particular, you might consider First Tech Federal Credit Union.
Through this California-based credit union’s online services, you can transfer money among and outside First Tech accounts, view your transaction history and balances, pay your bills, as well as make First Tech loan and credit card payments on your phone, tablet, or computer.
Although First Tech doesn’t offer as many business loan options as some of the other credit unions on this list, they might be one of the best credit unions for small business checking and savings accounts. First Tech offers two business checking account options and three business savings account options, with as little as a $0 minimum balance requirement.
To become a member, you’ll need to work for a First Tech sponsor company; work for the state of Oregon; work or live Lane County, Oregon; or be a member of the Computer History Museum or Financial Fitness Association. Plus, immediate family members of First Tech members are also eligible to join.
Self-Help Credit Union earns a spot on our list of the best credit unions for small business for their stated mission of “creating and protecting ownership and economic opportunity for all,” which they achieve by working with traditionally underserved customers including people of color, women, rural residents, and low-income families, as well as offering accessible financial tools for nonprofits and small businesses.
Especially impressive is Self-Help’s small business loan program, which is among the most comprehensive we’ve seen from a credit union. In addition to term loans up to $250,000, Self-Help Credit Union offers commercial loans, SBA 504 loans, and New Markets Tax Credit Loans, which encourage investment in low-income communities. They can also furnish specialized loans, including financing for green businesses and recovery loans for businesses affected by Hurricane Matthew.
Moreover, on top of their small business loans, Self-Help offers credit union business accounts including term certificates, savings, and Money Market accounts.
To become a member of this North Carolina-based credit union, you’ll need to live, work, worship, or attend school in an eligible county; meet certain family or employer criteria; or become a member of the Center for Community Self-Help, which requires a $5 fee.
The next option on our list, Consumers Credit Union (CCU), is perhaps one of the best credit unions for small business in terms of eligibility requirements. To join this Illinois-based credit union, you simply need to be a member of the Consumers Cooperative Association, which requires you to pay a one-time fee of $5, as well as to open a membership share savings account with a $5 minimum deposit. Compared to many other credit unions which require you to live or work in a specific location, this option is available to a greater range of business owners.
This being said, the Consumers Credit Union offers four business checking accounts, one of which is specifically designed for non-profits and one that accommodates higher volume businesses. All of these accounts, however, include online banking, bill pay, and electronic statements. In addition, CCU offers three different business savings accounts, as well as a Visa business credit card.
Moreover, in terms of business loans, CCU provides a variety of options including— commercial mortgages, equipment financing, business lines of credit, and business construction and development loans.
What makes Digital Federal Credit Union (DFCU) unique—not only among the options on our list of the best credit unions for small business but among credit unions in general—is its equity crowdfunding feature. With this feature, DFCU members have the opportunity to invest in businesses in the community and both aspiring investors and businesses looking to raise capital can use this service.
This being said, on top of this unique service, DFCU offers a variety of other business financial tools including loans, business lines of credit, checking and savings accounts, as well as credit cards. Particularly noteworthy is the free DFCU business checking account, which requires no minimum balance and no maintenance fee, as well as the Premier Business Checking account, which is interest-bearing. Plus, both of these Digital Federal Credit Union business accounts include free mobile and online banking.
In order to join this Massachusetts-based credit union, you must either work for a DFCU eligible company; belong to a DFCU eligible organization; live, work, worship, or attend school in a DFCU eligible community; or be related to a current DFCU member.
Finally, we’ve reached the last option on our list of the best credit unions for small business owners: Boeing Employees Credit Union (BEC).
Originally started in 1935 by Boeing employees, this Washington-based credit union has since expanded its membership eligibility criteria to include those who live and work in Washington State, those who live and work in select Oregon and Idaho counties, and those who belong to select eligible associations.
This being said, overall, BEC offers a robust business banking program, as well as additional services. More specifically, BEC provides two different business checking accounts, both of which have no monthly fee, and one of which is interest-bearing. In addition, both of these accounts include free electronic debits and credits, free online banking and bill pay, free e-statements, and remote check deposits. Moreover, BEC also offers several savings account options including a no-fee savings account, Money Market accounts, fixed-rate CDs, and investment and retirement accounts.
Boeing Employees Credit Union also offers two no-fee business credit cards, one of which earns you 1.5% cash back on purchases. Plus, in terms of their loan products, BEC provides business term loans, auto loans, lines of credit, and commercial real estate loans.
Ultimately, there’s no doubt that any of the options on our list of the best credit unions for small business may be able to serve you well. This being said, however, the best option for your business will depend on which credit union is most accessible to you and if that credit union has the particular products you need.
Therefore, as you search through the different business-friendly credit unions, you’ll want to determine, first and foremost, which options are geographically accessible to you, as well as whether or not you can meet the qualifying criteria. Then, just as you would when selecting a traditional bank, you’ll want to consider what you need and expect from your banking institution: Are you planning on applying for a business loan? Do you simply need a free business checking account? Do you plan to do much of your banking remotely, or would you prefer to forge a personal relationship with your local branch?
By answering these questions, you’ll be able to narrow down your options to the ideal credit union, or perhaps, you’ll determine that a traditional bank might actually work best for your business. At the end of the day, the choice is yours.