CARMEL, Ind. — When it comes to attracting small business owners with higher net worth, credit unions are more than holding their own when compared to larger banks.
Baker Hill, an Experian Company, has just released its 2007 Baker Hill Benchmark Report Small Business Lending Edition. More than 160 financial institutions, including credit unions, were surveyed to garner feedback on their lending practices. One significant finding for credit unions was the average net worth of principals who submit a business loan application. In the approval category, the average net worth was $4.4 million compared to just under $2 million for financial institutions in the $500 million to $2 billion range.
"This is where credit unions really shine," said Joel Pruis, credit quality and origination practice manager at Baker Hill. "[The higher net worth] could be a combination of two things–the approvals could indicate that [credit unions] are not being terribly restrictive and of course, there are higher net worth people applying for loans."
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