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When Seeking Funding, Credit Unions Can Be Worth Checking Out More credit unions are offering business loans, and their interest rates and fees are often lower than at commercial banks. What's more, their loan officers typically have more flexibility and decision-making ability than those at larger institutions.

By Gwen Moran

Opinions expressed by Entrepreneur contributors are their own.

Is a Credit Union Right for You?While only offered at roughly a third of all credit unions, business loans are the fastest-growing segment of these member-owned institutions' loan portfolios, showing double-digit growth in three of the past five years. Could a credit union be the answer to your financial needs?

"Because credit unions are member-owned financial cooperatives, we don't have to make a lot of money," says Mike Schenk, vice president of economics and statistics with Credit Union National Association (CUNA), a Washington, D.C.-based trade organization. "You'll often find interest rates and fees lower than at commercial banks, and because the small-business borrowers are members, the credit union leadership is often likely to have more flexibility in lending to them."

At the same time, credit unions aren't interested in taking on a lot of risk, so it's important to shore up both personal and business credit scores before seeking loans. If you have black marks, be prepared to explain them to the loan officer, who may have more authority in making a decision than the loan officer at a larger bank with stricter regulations.