Credit unions across the country are sitting on an untapped goldmine. While they've mastered the art of serving individual consumers with competitive rates and member-centric service, serving small business owners continues to be a challenge.

Credit unions know this. Despite a temporary slow-down at the beginning of the year, credit unions are buying banks at a record rate. One key reason is to expand further into business lending and capitalize on the strong hold banks have on business banking.

Yet, small businesses still represent one of the most underserved segments in financial services, particularly when it comes to digital banking experiences. These entrepreneurs, who seamlessly manage their personal finances through mobile apps and online platforms, often find themselves trapped in antiquated business banking processes that feel like stepping back in time. They're forced to navigate paper-heavy applications, wait weeks for approvals, and deal with fragmented systems that make simple tasks unnecessarily complex.

For credit unions, this represents a massive opportunity.

Unlike large banks that treat small businesses as just another account number, credit unions have the community connections and member-focused culture that small business owners crave. In fact, credit unions outperform banks in overall satisfaction, according to J.D. Power’s 2025 U.S. Credit Union Satisfaction Study^SM. They understand local markets, build genuine relationships, and have the flexibility to make decisions that larger institutions simply can't

match.

The traditional underwriting process for small business loans is both time-consuming and expensive, with manual underwriting costing lenders between $3,000 and $5,000 per loan, says Shane Knighton, VP of Business at Travis Credit Union. These inefficiencies often discourage financial institutions from serving smaller clients, leaving many small businesses underfunded.

“According to the Federal Reserve’s 2025 Firms in Focus chartbooks, 32% of small employer firms report having no outstanding debt, while 21% carry less than $50,000, and 47% have debt exceeding $50,000, a clear indication of the widespread need for accessible, scalable credit solutions,” explained Knighton. “Digital lending platforms can automate much of the underwriting process using real-time financial data, reducing costs and accelerating approvals. This not only improves access to capital for small businesses but also enables financial institutions to serve this vital segment more profitably and efficiently.”

Still, many credit unions haven’t translated that strength into a winning digital business banking experience. While they are actively targeting this segment (and in some cases outperforming banks in lending or service), the digital journey remains a major weak spot. J.D. Power’s data shows declining satisfaction with credit union mobile apps, with members citing lack of clarity, limited services, and poor navigation.

The root of this problem lies in the technological infrastructure that most credit unions rely on to serve business members. A small business owner might apply for a checking account in one system, request a loan in another, and manage their credit card in a third, each requiring them to start from scratch, re-enter the same data, and learn a new interface.

When it boils down to it, small business applications are far more complex than consumer ones. Unlike individual or joint accounts, business accounts often involve multiple owners, partners, or entity structures. And more often than not, systems aren’t designed for that complexity.

This fragmented approach doesn't just frustrate business owners – it costs credit unions money. Every inefficient process represents lost staff productivity, delayed onboarding that allows competitors to swoop in, and missed opportunities to deepen relationships through cross-selling additional products and services. When a sole proprietor opens a business account, but the system can't easily identify opportunities to bring their spouse on as a co-owner or suggest relevant personal banking products, the credit union loses valuable touchpoints that could strengthen the entire household relationship.

The solution isn't just about technology. It's about reimagining how credit unions think about business banking relationships. Modern platforms can transform what was once a weeks-long administrative burden into a relationship-building opportunity that starts the moment a business owner begins their application. Pre-filled applications eliminate redundant data entry, automated compliance checks speed up approvals, and integrated systems make it easy for staff to identify and act on cross-selling opportunities.

Imagine the difference: Today, a restaurant owner might spend days filling out forms, waiting for approvals, and redoing everything just to add a co-owner. With a unified platform, that same owner could apply in minutes, get preliminary approval instantly, invite their partner digitally, and be shown additional services like merchant accounts or business credit cards, all in one place.

This isn’t just about convenience. It’s about competitive advantage. When a business owner has checking, savings, loans, and credit cards all in one place, switching becomes much harder. These deeper relationships also tend to be more profitable, as business members typically maintain higher average balances and utilize more services than individual consumers.

And perhaps most importantly, helping small businesses thrive fulfills the credit union mission. Small businesses generate over 55% of net new jobs in the U.S. between 2013 and 2023. Credit unions that support them aren’t just building stronger books; they’re investing in the health of the communities they serve.

The credit unions that recognize this opportunity now will have a significant first-mover advantage. As small business expectations continue to rise and competition intensifies, the institutions that can deliver modern, integrated business banking experiences will capture a disproportionate share of this lu...