Many of America’s Credit Unions’ policy priorities to support small businesses are included in a report released Monday by the Treasury on increasing small business financing. The Treasury invited America's Credit Unions to participate in its  September roundtable event focused on developing the policy brief.

The brief describes trends in small business capital access and barriers facing small business owners seeking financing from capital providers, including banks and credit unions, while outlining potential next steps for Treasury, government agencies, and the financial services sector to consider.

Key findings involving credit unions include:

• In the last decade, large banks tightened credit standards and originated fewer loans, while credit unions increased their participation in the small business loan market (but originate relatively few loans compared to banks and fintechs);
• Business owners report credit unions often perform outreach and develop relationships to provide assistance navigating financing requirements, stakeholders found fewer instances of outreach and technical assistance from large banks, and banks self-reported hesitancy to meet with potential borrowers;
• Mission-driven lenders, including community development financial institutions (CDFIs), have made a meaningful impact in providing capital to underserved populations but don’t always fill remaining gaps in capital access; and
• Underserved business owners can face unique challenges, including limited connection to small business capital sources, lack of personal resources, and cultural barriers to accessing financial services.

Several recommendations echo America’s Credit Unions’ priorities for increasing capital to small businesses, including: 

• Policymakers continue to engage with industry stakeholders to evaluate the need for additional small business financing and discuss how to expand access to fill gaps;
• Capital providers consider how to deepen small business access to capital;
• Government agencies strengthen coordination with each other to foster a robust and inclusive financial system; and
• Regulators continue to coordinate their approach to emerging technologies, such as AI, including promoting consistent and robust standards for financial institutions deploying new technology.

Read the full report.