Most credit union PPP loans went to businesses with under 10 workers

New data from the National Association of Federally-Insured Credit Unions provides one of the first wide-scale looks into how credit unions have performed with the Paycheck Protection Program.

A survey in the trade group’s Economic and Credit Union Monitor publication reports that the average respondent submitted an average of 37 PPP loans during the program’s first round, with many continuing to accept applications once funding had been exhausted.

Of the PPP loans credit unions have originated so far, nearly 80% have reportedly been for businesses with fewer than 10 employees. Just 2% of total loans from credit unions have gone to businesses with 51 to 100 employees, and no credit unions that responded to the survey have provided PPP funding for employers with 101 workers or more.

NAFCU also found that credit unions weren’t immune to PPP’s rocky rollout. A majority of credit unions that responded to the group’s survey struggled to access the website for applications, and long wait times for technical fixes made it more difficult to access the E-Tran portal. Later modifications to PPP, including hours in which larger institutions were restricted from submitting applications, reportedly made the process easier.

One of the big questions surrounding the success of PPP is how other programs from the Small Business Administration might be impacted. NAFCU has long had a partnership with the SBA to help boost participation in its 7(a) loan program, but credit unions as a rule don’t extensively make use of SBA initiatives. NAFCU’s report shows that could be changing. More than 40% of those who responded to the association’s survey suggested PPP had spurred greater interest in SBA programs, such as 7(a) and its CDC/504 offerings.

The NAFCU report also predicts credit unions’ year-over-year loan growth will fall by more than half this year, from 8.2% last year to 4%, according to the group’s data, with loan growth rising to 5% in 2021. Membership growth will fall from 3.6% to 2.5% this year before rising to 3% next year, NAFCU predicted. Those figures are a stark contrast to a recent report from CUNA Mutual Group, which predicted membership growth of just 1% this year followed by a 1.5% rate each year through 2023.