LOS ANGELES—A survey conducted by the Los Angeles Business Journal has found credit unions slowly inching up as the preference of small business owners when it comes to lending sources. But the survey also found another new player emerging, as well.
The publication said that in a recent online poll it asked small business owners about their borrowing preference, with one-sixth indicating “large bank” was their primary choice, which is down from a decade ago when it first started conducting the survey. “Following the 2008 financial crisis, large banks stopped lending to small business while they struggled with their own regulatory stress tests,” the LA Business Journal said in its analysis. “They're lending to small businesses again, but are now in catch-up mode.”
One-eighth of respondents in the survey selected “credit union” as their lending preference, which is up over that same period. “Much to the chagrin of banks, credit unions, which have expanded their customer profiles to include small businesses, aren't taxed like banks and aren't subject to community reinvestment requirements,” the publication reported.
Meanwhile, the number-one source of loans remains community banks, with two-thirds identifying those institutions as their primary source for small business loans.
“The big news of our poll is that crowdfunding popped up on the lending radar for the first time,” said the LA Business Journal. “The number was only 3%, but this credit source is very new.”