In February, U.S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet and National Credit Union Administration (NCUA) Board Chairman Debbie Matz signed a Memorandum of Understanding (MOU) to invest in America's entrepreneurial potential by expanding the accessibility of small dollar SBA loans from credit unions. By partnering together, the two groups will be able to increase awareness about SBA's loan programs for credit unions and the NCUA.

According to the National Credit Union Administration and the Federal Deposit Insurance Corp., federally insured credit unions (FICU) have already outpaced banks in small-business loan growth over the past several years- here are the numbers to prove it:

2011: Small-business lending up 5.1 percent at FICUs, down 4.3 percent at banks.

2012: Up 6.5 percent at FICUs, down 1.5 percent at banks.

2013: Up 10.1 percent at FICUs, down 0.5 percent at banks.

2014: Up 12.4 percent at FICUs, up a modest 1.9 percent at banks.

Unfortunately, credit unions have been hampered from doing more business lending by an arbitrary lending cap that limits their business loans to 12.25 percent of assets, but no more. The loan amounts will not count against the total assets federal cap on commercial lending, in part because for their federal tax exempt status.

“A unique aspect of the SBA and NCUA partnership is that SBA small dollar loans do not count against credit unions' business loan cap, so they are well suited to expanding access to these loans. This provides flexibility to credit unions to distribute small dollar loans, increasing access to capital to local economies and enriching the entrepreneurial communities which credit unions serve. Since 2011, the outstanding balance of SBA loans by credit unions has seen nearly a 50 percent increase – from $810 million to $1.2 billion. This signals a growing demand for SBA loan programs. Millions of Americans have used their credit union to finance their car, home or children's education. We want to empower credit unions to finance small business start-ups, too,” said Administrator Contreras-Sweet in a statement.

SBA loans are available for most business purposes, including the purchase of machinery or equipment, debt refinance, working capital, expansion needs, or start-up of a new business. Repayment terms are generally longer than conventional loan programs, which can have a positive impact on a company's cash flow.

Advantages of an SBA Loan:

• Up to 90% financing available
• Longer repayment terms – up to 25 years for real estate acquisitions
• Fully amortized loans – No Balloon Payments
• Competitive interest rates
• Funding typically occurs as fast as 45 days
• Projected income considerations

Once a loan is approved, the SBA has a vast network of resource partners such as SCORE, Women's Business Centers (WBCs), and Small Business Development Centers (SBDCs) to offer free counseling and technical assistance to help small business owners deploy their working capital and grow their businesses and revenues. The SBA is making small dollar loans a top priority in efforts to increase business lending and reach to underserved borrowers. Five years ago, credit unions made 835 SBA loans of under $50,000 totaling $21.7 million. But the totals dropped to 502 loans worth $12.4 million last year.

According to the SBA, an additional benefit of this partnership is that it expands access to capital to encore entrepreneurs such as Trace, individuals planning to start a business after earlier career endeavors. The average age of credit union members is 47 and the fastest-growing group of entrepreneurs consists of men and women age 50 and above, spurred by the low cost of starting a successful small business.