Three credit unions have entered into referral agreements so that they can provide their small loans to member businesses in California through the Opportunity Fund, a community development financial institution based in San Jose, California.
The nonprofit on Tuesday announced partnerships with Self-Help Federal Credit Union of Durham, NC ($ 1.5 billion in assets, 80,005 members), UMe Credit Union of Burbank, Calif. (272.6 million, 15,789 members) and Meriwest Credit Union of San Jose, Calif. ($ 1.9 billion, 87,651 members).
The Opportunity Fund has made more than $ 500 million in loans to small businesses since its inception in 1994. Of the 2,778 loans made in its fiscal year ended June 30, 2020, 43% of owners were Hispanic, 21% were Asian and 8% were Black.
The average business had three employees.
Opportunity Fund supports working capital loans of $ 2,600 to $ 100,000 to underserved businesses. He says it offers flexible underwriting criteria, less onerous documentation requirements than other lenders, and multilingual customer service representatives who are available 12 hours a day, 7 days a week.
Referral agreements are designed to allow credit unions to help members meet their business needs for loans that the credit union does not originate from. In return, the credit unions receive a small fee and maintain the overall banking relationship while the Opportunity Fund manages the loans.
âHelping people is at the heart of what we do at UMe Credit Union,â said Anita Hutchinson, Director of Marketing. âHaving a trusted Opportunity Fund partner to refer our members to for small business loans that we don’t offer in branch allows us to fulfill our mission and keep members happy. “
The Opportunity Fund website lists 27 partner organizations. Only three of these are credit unions: Self-Help FCU, Comunidad Latina Federal Credit Union of Santa Ana, California ($ 5.8 million, 1,360 members) and E-Central Credit Union of Pasadena, California ( $ 187.6 million, 13,137 members).
Sarah Brennan, Southern California senior vice president for Self-Help FCU, said the partnership helps the credit union create and protect economic opportunity.
âBy working with Opportunity Fund, we are referring members for small business loans that we do not offer in branch,â said Brennan, âmaking sure that it is us or our trusted partner, Opportunity Fund, we can support entrepreneurs – especially entrepreneurs of color, women and immigrant business owners – to make their dreams come true.