The leaders of the SBA and NAFCU met Wednesday to advance the agency's goal of helping more credit unions make small business loans to their members.

SBA Administrator Maria Contreras-Sweet and NAFCU President/CEO Dan Berger met at the $95 million Washington Gas Light Federal Credit Union in Springfield, Va., to sign a Memorandum of Understanding that emphasized the two organizations' willingness to work together.

Among the goals were to draw attention to the SBA's loan programs, particularly the agency's micro loans, which are defined as business loans for less than $50,000, according to Ann Marie Melhum, SBA's associate administrator for capital access.

Berger said NAFCU would work to help debunk some of the long-standing beliefs among credit unions about SBA lending, such as the idea that the agency's loans were complicated and too much of a compliance headache to be worth pursuing.

“There will always be some application and paperwork involved,” Berger said. “But overall, they have really streamlined the process and made it easier and more functional to use. We want to make sure credit unions know and understand that.”

He also described the small business loan of less than $50,000 as a sweet spot for credit unions.

“Let's face it, banks don't want to do business loans for less than $250,000,” Berger said.

Lynette Smith, president/CEO of the 8,600 member-Washington Gas Light FCU, said the news about the SBA's outreach to credit unions is an exciting venture.

“We have long wanted to do more business lending, but had not really felt it was accessible to us,” she said.

Smith characterized the credit union as a “savers credit union” with a history of relatively low loan to share ratios.

Roughly half of the employees of Washington Gas Light FCU's largest SEG would become eligible and retire within five years, she added.

“We need to be ready to meet their needs if they want so start a small business in retirement,” Smith said.

Last week, the NCUA and the SBA announced a joint partnership to help small businesses and credit unions connect for better access to capital and to boost awareness of SBA programs.

“This is a tremendous opportunity for credit unions and small business owners,” NCUA Board Chairman Debbie Matz said. “SBA-guaranteed loans made by credit unions provide needed capital for existing small businesses and start-ups that might have difficulty obtaining loans from other institutions.”

Matz said SBA loans rank among credit unions' safest loans.