The United States is home to more than 30 million microbusinesses, and these firms play a critical role in shaping the nation’s economy.
These businesses have been hit especially hard by the pandemic-driven economic downturn, however, which has led many to seek federal assistance through their financial institutions (FIs) to stay afloat.
Credit unions (CUs) have been particularly invested in helping microbusinesses, with PYMNTS’ Credit Union Innovation Playbook: Microbusiness Opportunity Edition finding that 40.8 percent of CUs plan to roll out innovations geared toward these firms within the next three years. Many CUs are also working to provide microbusinesses and small- to medium-sized businesses (SMBs) with digital access to the federal aid they need, such as Paycheck Protection Program (PPP) loans. Microbusinesses still often struggle to access key services, however, and are willing to switch FIs if their needs are not met.
In the August Credit Union Tracker®, PYMNTS examines how microbusinesses remain integral to many CUs’ innovation plans, as well as how CUs are uniquely placed to offer support to these businesses during the pandemic.
Around The Credit Union World
Many CUs are enhancing their digital services as consumers increasingly gravitate toward making online purchases during the pandemic. One recent report found that the nimblest CUs are offering as many as 20 distinct digital features and services, illustrating that CUs are making significant technological investments to meet consumers’ needs.
Numerous non-financial organizations are also taking closer looks at microbusinesses’ operations to determine what they are doing to stay afloat. The UPS Store has conducted periodic microbusiness-focused surveys since March to uncover the major obstacles these firms are facing and learn how they are adapting to adversity, for example. It found that 92 percent of microbusinesses are seeing cash flow crunches as a result of the pandemic, revealing that helping them access critical funding is more important than ever for CUs and other FIs.
Four Oregon CUs recently announced that they are participating in a state-funded program to help disburse pandemic-related grants to SMBs. The CUs — Central Willamette, Consolidated Community, Point West and Trailhead — will offer loans ranging from $2,500 to $12,500. The state-backed grants are geared toward helping historically disenfranchised business owners who are Asian, Black, Hispanic, Native American or female.
For more on these stories and other CU headlines, read the Tracker’s News and Trends.
CUs Help Microbusinesses Navigate Pandemic Recovery
CUs around the nation have been assisting SMBs and microbusinesses with online loan applications for needed federal assistance, such as PPP loans. This role has also helped CUs determine how they can better support these small businesses’ successes both now and in the future.
Deep Dive: Credit Unions Compete To Innovate For The Microbusiness Community
Microbusinesses are becoming increasingly important to CUs as they plan their future business strategies and innovation approaches. There are more than 30 millions of the small firms in the U.S., which can greatly affect the nation’s economy.
This month’s Deep Dive examines the challenges CUs face in developing technological innovations to better serve microbusinesses’ needs.
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