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SBA Loans Provide Hope for Small Businesses in Need

ESL Federal Credit Union listed among the most frequently used SBA lenders in the country.

By Keith Cleary, senior vice president, director of business banking, ESL Federal Credit Union
June 5, 2018

Small businesses that routinely expand and hire new employees are likely to be backed by some sort of financing. However, according to the Federal Reserve’s Small Business Credit Survey1, only 40 percent of small businesses applying for financing in 2016 were able to receive the amount they sought.

This gap in financing forces many neighborhood businesses, basement entrepreneurs, and other types of small businesses to lean on personal credit cards, private loans from family and friends, vendor credits, and other types of financing to jumpstart their businesses.

The fact is that in the small business world, some investments are risky. Owners with a low personal credit score, incomplete business plan, or those entering a new industry with little background already have a tough road ahead of them.

There is no quick fix for these business owners.

Lending programs with the Small Business Administration (SBA) may just provide the nudge needed to make a good loan look even better — particularly among small businesses without much of a track record.

The SBA doesn’t make direct loans, but it does provide a guarantee to lenders, such as ESL Federal Credit Union, on the funds lent to small business owners. The guarantee protects lenders by promising to pay back a portion if a business defaults. This guarantee essentially acts as a safety net that allows lenders to provide more loans to small businesses knowing that they are taking on less risk.

It also opens up a wide range of opportunities to small businesses needing new equipment, looking to acquire new customers and other businesses or those facing a long recovery after a natural disaster, and more.

The SBA loan program has become a clear focus for ESL, having driven 127 loans for roughly $8.2 million in the SBA’s 2017 fiscal year. Nearly all of those loans originated in our Monroe County branches.

We are currently on pace to top last year’s mark, having already approved 88 loans through the first six months of the fiscal year starting in October. The number of loans for this fiscal year puts ESL at No. 41 among the country’s top SBA lenders.

Access to financing will always be a need for small businesses, and those with high risk factors will still need to prove their worth to secure financing.

But for business owners needing a little extra push, the SBA can provide the financial support and encouragement needed to secure financing that could lead to increasing hires, growing operations, and ultimately boosting revenues.

Click here to learn more about Small Business Administration lending with ESL. Membership subject to eligibility.


  1. “Availability of Credit to Small Businesses,” Federal Reserve System, September 2017.