As your business becomes more profitable and better able to support you financially, you may decide to concentrate all your energies and time on your business.
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As your business gets going and as it grows, you may need additional capital.
In your search for capital, don't forget credit unions.
The company for which you or another family member works may have a credit union. If you decide to start your business while you are still working for a large company, you may be able to borrow some of the capital you will need from the credit union.
Credit unions are financial institutions developed by the members or employees of a company, labor union or other group.
They are not-for-profit, membership-based financial institutions. They are regulated by the National Credit Union Administration.
Their overall goal is service to their members, so, believe it or not, profit making is not the primary motivator for credit unions.
As a result, their interest rates and other terms tend to be more favorable than those offered by a bank.
Plus, while banks are struggling in the current difficult economy, credit unions are doing much better.
Unlike banks, they have not been exposed to the huge losses in mortgage investments that have slowed down bank lending.
What are the advantages of borrowing money from a credit union?
As mentioned above, credit union interest rates are often lower than the rates charged by other lenders. The amount you will be able to borrow from a credit union may not be large, but this source of funds may be helpful in making initial purchases for your business.
Also, a loan application through a credit union may be more likely to be approved as you may be known to the individual evaluating your loan request.
How can I get a business loan from my credit union?
You must belong to a credit union to apply for a business loan from them.
If you're employed, ask the human resources department of the company where you work about your eligibility to join a credit union. There are also directories available at your local library listing all of the credit unions in the United States.
Once you have become part of a credit union, you can contact them for instructions on how to apply for a business loan.