The best credit union for your small business will be one that gives you a secure place to keep and increase your cash.

Some small business owners might be unaware or unsure of the advantages of opening an account with a credit union rather than a typical bank.

Knowing what makes credit unions different from banks, what they can offer and how they can match the needs of your small business could lead you to choose a top credit union.

What is a Credit Union?

Unlike banks, which are closely held by owners or have stock available to public investors, a credit union is a financial cooperative owned by its members. When you apply to join a credit union, you essentially become a member-owner.

Credit unions are set up as nonprofits. Members appoint a board, who in turn appoint managers to run the daily operations.

Advantages of Credit Unions

The nonprofit structure of credit unions leads to a number of advantages. Instead of focusing on making more money, credit unions look out for the best interests of their members.

To this end, credit union savings account interest rates are higher and financing rates are lower than banks. That means that, when joining a credit union, business accounts can earn more and spend less.

Because of their community-driven focus, credit unions can offer a more personal touch when it comes to customer service — a big plus for business owners who value the working relationships they have with other companies.

Disadvantages of Credit Unions

The small, community-based, nonprofit status of credit unions also lends itself to certain disadvantages.

First, you may not meet the requirements needed to join one. Because credit unions typically serve a specific group, you have to be a part of it to reap the benefits.

Some common criteria include:

  • Working for a certain employer
  • Living in a certain community or region
  • Being a member of a union
  • Having a family military history

Even if you don’t meet the requirements, you still may be able to join a credit union. Some may offer you membership if you join an approved group. This often involves making a payment of dues to an organization connected to the credit union.

Deciding bank vs. credit union business account? Consider your small business needs. Most credit unions can’t compete with the technological advantages of big banks. While service and access to a business debit card is a credit union standard,  added features such as online bill paying and mobile checking may not be available.

If you’re considering taking out loans in the future, note that credit unions may not offer the same credit-card and financing options as banks because of their limited resources. Automated teller machines and branch locations also may be more difficult to come by.

Make sure to go over exactly what you need, want and expect before joining a credit union.

Small business tip: Some small business owners are wary of trusting their money with credit unions because they aren’t insured by the Federal Deposit Insurance Corp., but that shouldn’t be the case.

Most credit unions are backed by the National Credit Union Administration (NCUA). The NCUA insures credit union accounts up to $250,000.

The 6 Best Credit Unions for Small Business Banking

If you want to make the most of your small business banking, credit unions may be the way to go. The best credit unions are those that anyone can join, have great small business account options and offer affordable loan products.

Here are the 6 best:

Consumers Credit Union

At a Glance

  • Multiple checking and savings account options
  • Visa Platinum credit card with no annual fee
  • 24/7 customer service
  • Online/ mobile checking and bill pay

 

What makes Consumers Credit Union stand out is that just about anyone can join. All you need to do is pay $5 to become a member of the Consumers Cooperative Association.

Consumers Credit Union also has multiple banking options, including two free small business checking accounts. You can enroll in the basic commercial checking or corporate accounts based on the average daily balance you’ll keep.

There also are two business savings account options, including a money market account that can yield higher interest rates.

Consumers Credit Union offers access to a business Visa platinum card with no annual fees in addition to their Visa debit cards.

You also can secure equipment financing, business lines of credit and commercial mortgages with terms as long as 25 years. This term length makes Consumers one of the best credit unions for small business loans.

Opening a credit union business account.

Navy Federal Credit Union

At a Glance

  • Competitive rates on business account options
  • Full array of small business loan products
  • Visa and MasterCard credit cards
  • Exclusive to service members and families

 

With more than 8 million members, the Navy Federal Credit Union (NFCU) boasts the largest credit union membership in the country.

The NFCU offers a full array of business resources, including checking and money market savings accounts with competitive rates.

They can also compete with the best banks for small business loans. You can apply for business lines of credit, commercial mortgages, commercial auto loans and both secured and unsecured term loans.

NFCU has two different business credit cards to choose from. Both have no annual fees and lower interest rates than you’ll find with other financial institutions.

The biggest drawback to NFCU is the membership requirements. If you aren’t an active-duty or retired military service member, a family member of one or an employee of the Department of Defense, you won’t be eligible.

Alliant Credit Union

At a Glance

  • High interest rates on checking and savings accounts
  • Cashback and rewards credit cards
  • Easy to join
  • Limited options for businesses

 

Chicago-based Alliant Credit Union offers high interest rates on savings, but falls short on business-specific options.

The 2.1% annual percentage yield (APY) on their high-rate savings account would have been a shoo-in for the best high-yield business savings accounts, if it wasn’t a consumer option. Alliant also offers higher-than-average rates for checking accounts, but they’re not specific to business owners.

While you could open an account with Alliant, but it may prove difficult to keep your business and personal finances separate.

Alliant offers commercial real-estate loans, but at this time that’s the only loan they offer suited for businesses.

If you need a credit card, Alliant has cash-back and rewards options that sets it apart from some other credit unions.

If you don’t meet Alliant’s eligibility qualifications you can gain membership by joining Foster Care to Success, an organization that provides scholarships and other support to foster children.

America First Credit Union

At-a-Glance

  • Multiple checking and savings account options
  • Full array of small business loan products
  • Easily accessible on the go
  • Exclusive to certain regions

 

Based in Ogden, Utah, America First Credit Union (AFCU) business has a great selection of business account products.

AFCU has some of the best small business checking accounts credit unions offer. You can sign up for the free basic account if your business doesn’t make many transactions or pay a small monthly fee for AFCU’s corporate and high-yield options.

There are three savings options including a money market account and dedicated plans that save money for specific causes.

America First also offers one of the most extensive selections of financing available. You can take out capital for equipment, real estate, business acquisitions and more. The various options make AFCU one of the best credit unions for small business loans.

With mobile banking, online bill pay and more than 100 locations, AFCU is one of the more convenient options on the list.

Accessibility is the disadvantage here. Currently, only those who work for select employers or live in certain counties in Arizona, Nevada and Utah are eligible.

Self-Help Credit Union

At-a-Glance

  • Free business savings account
  • Access to SBA loans
  • Focus on underserved communities
  • No true business checking account

 

The mission of Self-Help Credit Union (SHCU) is to provide economic opportunity for all, focusing on underserved communities and demographics. This includes minorities, women and other socioeconomically-disadvantaged groups.

You can open up a free business savings account, or choose a money market option. Unfortunately, Self-Help Credit Union doesn’t currently offer a true business checking account.

What they lack in account options, they make up for with loan products. As a community development financial institution (CDFI), Self-Help can offer Small Business Administration 504 loans. These government-backed loans offer high funding amounts and low interest rates, allowing SHCU to compete with the best banks for small business loans.

You can apply for other SBA loans, term loans, equipment financing and more through SHCU.

Eligible members include residents of certain communities in North Carolina and Florida and those who meet their family or employer criteria. You also can join by paying a $5 membership fee to the Center for Community Self-Help, which carries on the mission of the credit union. The focus on charity makes it one of the best credit unions that anyone can join.

Online small business banking with credit unions.

First Tech Federal Credit Union

At a Glance

  • Multiple free business checking accounts
  • Robust online and mobile features
  • High commercial real estate loan amounts
  • No other business loan options

 

As the name suggests, First Tech Federal Credit Union is suited for those who prioritize technological features in their business banking partner.

With this credit union, business accounts have access to multiple options. You can choose one of two free small business checking accounts, including one with a 0.1% APY.

If your goal is to save, you’ll have three options. With First Tech Federal Credit Union, savings account interest rates reach up to 1% APY.

You’ll enjoy mobile check deposit and other online and mobile features usually reserved for big banks.

Loan options are limited to commercial real estate, but First Tech does offer higher loan amounts than other credit unions on our list (up to $10 million). Those who need money can choose from business credit cards maxing out at $100,000 with multiple rewards programs.

You can join if you work for an eligible tech company or the state of Oregon, live or work in Lane County, Oregon, or join the Computer History Museum or Financial Fitness Association.

Choosing the Right Credit Union Business Account

If you like some of the options on the list and want to join a credit union, consider what you’re looking for. If you just want the basics, look for the option that will be most convenient for you.

If you’re looking for high-yield savings accounts or loans, the best credit union for your small business will become clear.

Small business banking with a credit union may be just the thing for you. Just make sure you’re eligible and you can begin the application process today.

 

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