Picked a local bank over a national one for my cafe loan - here is how it played out

When I opened my sandwich shop in Hamtramck last year, I had to choose between a big name bank and a local credit union for my startup loan. The national bank offered a slightly lower rate, but the credit union actually took time to understand my business model and walk me through repayment options. I went with the local credit union because they didn't require a personal guarantee on the full amount. Three months in, I had a cash flow hiccup and they worked with me on a payment extension without any fees. Anyone else go local for financing and find it helped more than the interest rate difference?

2 comments

2 Comments

lewis.finley4d ago

Did the local bank ever try to push you into a different loan product or higher amount than you originally asked for? I'm curious because I've heard some credit unions can be just as aggressive as big banks once they've got you in the door... but maybe that's just a rumor. How hands-on were they with checking in on your business after the loan was approved?

sage3084d ago

Exact same thing happened with my auto shop loan. The big bank wanted all kinds of collateral but the local credit union actually asked about my business plan first. When my equipment broke down six months in they let me defer a payment no questions asked. That personal connection is worth way more than a fraction of a percent.