Page 10 - Michigan Credit Union League: CU Impact Report
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10 CREDIT UNION IMPACT REPORT FALL 2020
HELPING SMALL BUSINESSES
SURVIVE COVID-19
LAFCU & CASE CU help YMCA of Metropolitan Lansing deliver 8,000 meals.
This past March, small business owners, many of impact more than 77,000 employees during the early
whom rely on in-person business, had to figure out stages of the pandemic.
how to survive while keeping their doors closed.
Additionally, 10% of these loans, or nearly 2,000
Soon after, the Small Business Administration (SBA) businesses were new or non-members that turned to a
launched the Paycheck Protection Program (PPP), a credit union after being turned away by other lenders.
program to provide small businesses, independent What can we learn from these stats? Credit unions
contractors and others with the financial resources are assisting small businesses, of course, but it’s
necessary to cover critical business expenses. The worth taking a closer look at the specific impact of
SBA promised loan forgiveness following application this assistance.
if PPP loan guidance was properly followed:
financials to be used for prescribed percentages on An average of five employees per small business
payroll, interest on mortgages, rent and utilities. means these businesses were very small — well below
the size threshold for PPP eligibility. And the median
Consistent with our industry’s dedication to helping loan size of Michigan credit union-assisted PPP loans
small businesses, Michigan credit unions jumped at is approximately $20,400. This is much lower than the
the opportunity to help community small businesses average bank loan size through two rounds of loans
navigate the application process and secure — $218,000 — further exhibiting the small size of the
necessary funds. businesses that our state’s credit unions have focused
on during the pandemic.
Distribution of more than 10,400 PPP loans to
Michigan credit unions in Q2 equals nearly $600 Only 3% of total PPP loans were distributed by the
million for small businesses. With an average of five country’s four largest banks, according to the Filene
employees per small business, this means Michigan Research Institute, while locally oriented financial
credit unions helped these businesses positively institutions took the charge.
