Better access to capital for small businesses in Tennessee Communities


Small businesses are the backbone of our economy. Tennessee credit unions have proudly supported our small businesses in many ways. Many credit unions recently participated in the Paycheck Protection Program to provide access to much needed forgivable loans to make ends meet. TCUL provides access to financial services and work with each individual business as a member of the credit union for solutions that work for them.

The COVID-19 pandemic hit small businesses hard. An estimated 1,120 Tennessee businesses permanently closed between March and July last year according to Yelp. That’s thousands more Tennesseans left without a paycheck and uncertainty for the future. Small business accounts for 64% of new jobs created and 95% of all U.S. companies, their value to the local, state, and national economies is unparalleled. The Payment Protection Program (PPP) helped alleviate some stress for employers and the average size PPP loan from TN credit unions was $27,500 (CUNA), a testament to the types of mom and pop businesses that needed help during these unprecedented times. Each PPP loan made by a credit union saved an average of almost 4 jobs, a small figure, but when the average small business employs only 2-10 people, that’s a huge percentage!

Unfortunately, credit unions ability to help even more small businesses and communities is hindered by the Member Business Lending (MBL) cap, an arbitrary regulation Congress passed in 1998 that limits business lending to 12.25% of assets. This has severely limited credit union’s ability to help provide capital to small businesses that desperately need assistance and may have been turned down by other financial institutions. Similar to the 2008 recession, this pandemic has caused the U.S. economy to recede, extending access to capital for small businesses is a proven catalyst for the economy – providing income and jobs to the unemployed. During the first year of the last major recession in 2008, millions of jobs were created by businesses less than one year old. Removing the MBL cap could be a boom for small town communities, a fixture of the Tennessee landscape. 

As not-for-profit and member-owned organizations, credit unions invest and give back to their local communities – and have proven to be more likely to loan during recessions than their bank counterparts. Regardless of the current situation, TN credit unions will continue to do everything in their power to support Main Street businesses and the people of their communities.

The Tennessee Credit Union League was formed in 1934 as a 501 (c) (6) non-profit trade association for Tennessee credit unions. It is the mission of the League to promote and support the success and advancement of credit unions in meeting their service and structural goals.