If you're a business owner in California looking for finance, consider joining California Credit Union. California Credit Union (CCU) started under the "Los Angeles Teachers Credit Union." It's a state-chartered credit union operating in the Southern Californian region, focusing on providing financial services to its members in the education community.
CCU was the 14th largest credit union by size in 2014, with more than $3-billion in assets under management. CCU has 24 branches across California and merged with North Island Credit Union in San Diego in 2017. CCU experienced rapid growth across California after the merger, elevating its position as the leading Californian credit union.
Georgia B. Parsons founded Los Angeles Teachers Credit Union in 1933, intending to provide financial services to teachers and the education community. Today, the credit union services current or retired educators, school employees, alumni association members, or PTA members living in San Diego, Riverside, or Orange County, CA.
After acquiring North Island Credit Union, Los Angeles Teachers Credit Union rebranded to "California Credit union," regulated under the California Department of Financial Institutions and the National Credit Union Administration (NCUA), a US federal government agency.
CCU offers a range of business financing services for qualifying members. All deposits with CCU benefit from NCUA federal insurance. However, is CCU the best option for business owners looking for financing. Let's unpack the offering from CCU to see if it's a good fit for your business.
“California Credit Union is one of the largest in the state, and has everything you need to manage and grow your business.”
What Does California Credit Union Offer?
California Credit Union brings you a range of financial services for your business. You have access to business banking, loans, and credit facilities to keep the day-to-day operations of your business moving forward. You also have access to the capital you need to grow.
California Credit Union offers your business a complete financial solution, provided that you live in the southwestern region of the state of California. CCU is one of the largest credit unions in the state, and it has everything you need to manage and grow your business.
Complete Business Banking
Short-Term Financing Products
CCU covers your business with the short-term lending solutions you need to sustain your cash flow. If you have issues with your accounts receivables thinning your cash flow, apply for a credit card or business line of credit with CCU.
Long-term financing solutions
CCU offers your business term loans, auto, and commercial real estate loans with flexible terms and great rates. You can expand your fleet, your investments, or your production facility with long-term financing solutions from CCU.
CCU offers its business members a complete suite of online banking services. You get fast, secure access to your account, transfers, balances, and payments all in one place for easy access.
What Types of Business Loans Can I Get with California Credit Union?
California credit union offers you a complete range of business financing solutions. You have short and long-term options and enough capital to quench your business financing demand. You get credit and loan facilities available for small, medium, and large businesses.
Whether you're a home-based business, a mom-and-pop corner store, an SME, or a corporation, you'll find the financing you need with CCU. Let's unpack the lending model in detail.
Visa® Business Credit Card
If you're looking to finance the day-to-day expenses of your business, apply for a Visa business credit card with CCU. The business credit card facility is ideal for small business owners that need access to instant cash for purchases.
There are no annual fees on the card, and account owners can designate cardholders and establish credit limits. You get a suite of online management tools to set up recurring payments on your card facility.
You also get tap-to-pay integrated into the card and Visa's zero liability protection with 24/7 account access through your digital banking facility. Depending on qualifying criteria, members can choose Business Platinum or Business Rewards. The average APR depends on your credit score and the company's financial health, but you get rates far cheaper than conventional banks, with rates between 6.8% to 17%.
Business Lines of Credit
The business line of credit is for SMEs whose cash flow requires more than a credit card to bridge their finances. The business line of credit lets you pay for inventory and manage your cash flow with your accounts receivables.
It's the ideal facility for seasonal businesses and comes with secured, cash-secured, and unsecured facilities to suit your needs. You also have SBA-guaranteed options for startups, and you only pay interest on the balance you use each month, not the entire facility.
You get fast, easy access to your funds through your digital banking suite or via branch transfer. Use a business line of credit as overdraft protection, with limits ranging from as little as $500 to as much as $5 million.
California Credit union offers qualifying businesses access to term loan facilities. The company must have a minimum track record of three years to qualify for a term loan with CCU. You'll also have to make a profit and be willing to prove it with your financial statements to access the loan.
You get great rates on your term loans and facilities tailored to your financial needs. Raise the capital you need for a large ticket equipment purchase and expand your business. You get fast turnaround times on approvals for amounts under $100,000 and local decision-makers.
The term loans from CCU have unsecured options and fixed and variable interest rates. You get flexible terms with CCU and cash-secured facilities with convenient automatic payments from your CCU business checking account.
As mentioned, CCU only offers term loans to established businesses with track records. If you're a startup, you don't have a track record. All you have is an idea. However, CCU partners with the Small Business Administration Loan program, a federal program designed to get startups the funding they need.
SBA loans are available for startups with no track record, and you have options for loan facilities or lines of credit. With SBA loans and lines of credit, the government insures the loan to a value of 80%, depending on your business plan and idea.
As a result, lenders are willing to take more risks with startups. The SBA Loan Program aims to grow American small businesses by providing access to business financing. The government-guaranteed SBA Loans are an intelligent source of funding for various business purposes.
Get the money you need for equipment purchases, owner-occupied commercial real estate, facility renovation, inventory, debt refinancing, and working capital.
The SBA 7(A) Loans program allows startups to borrow funds to acquire an established business and expand or renovate their existing facilities. The interest rate charged on the loan or credit facility varies depending on the loan size, term, and purpose.
SBA 504 Loans provide companies with long-term, fixed-rate loans for purchasing major fixed assets, such as equipment and buildings. These loans come with down payments as low as 10% on LTV, and variable APR, depending on your risk profile.
However, you can't use these loans for working capital purposes, purchasing inventory, repaying, or consolidating debt.
Cal Southern SBDC Loans Program assists local Californian companies with equipment financing, accounts receivable cash flow, and business purchases. They offer guarantees on short-term loans, similar to the SBA Loans Program model, but for local Californian businesses and entrepreneurs.
You also get access to revolving lines of credit, term loans, and more. CCU can assist you with applying for these loan programs to grow your business. Every branch has a dedicated business account and loans manager to advise you on the best financial products for your business.
Business Vehicle Loans
CCU offers business vehicle financing with up to 100% LTV financing on your tricks, cars, and other commercial vehicles.
Upgrade your fleet and use CCU to handle the financing. You get flexible terms and low rates, with loan terms up to 84 months. CCU provides quick decisions on local financing applications and fast approval.
Commercial Real Estate Financing
CCU offers commercial real estate financing for developers and investors. You get long-term, permanent commercial real estate financing for your projects and portfolio. CCU offers to fund commercial and industrial sites, office buildings, retail centers, and multi-family homes.
Qualifying members get access to loan amounts up to $15 million, with competitive rates and flexible terms for up to 12 years. You have options for up to 25-year amortization or 30 years for multi-family homes. All loans get local processing and fast approvals.
“Whether a startup or an established business, CCU has the financing you need.”
Who Should Apply for a Business Loan with California Credit Union?
CCU offers various financial services for companies at all stages of the business cycle. Whether a startup or an established business, CCU has the financing you need to keep your operations moving forward.
Credit facilities can help you with inventory purchases and managing your accounts receivables if you have a small business. You get easy access to cash to cover your creditors, keep inventory flowing, and make your payroll.
If you're a larger company looking to expand, CCU offers you the financing you need to dig deeper into the market and capture more market share. Expand your production facilities, purchase new equipment and keep growing.
If you're a real estate developer or investor, CCU offers you a range of financing products for purchasing properties, completing construction, and renovating properties.
As long as you live within the credit unions charter region in southern California, CCU offers you everything you need in business financing.
How Do I Qualify for Business Financing with California Credit Union?
You'll need to open a business account to qualify for business financing with CCU. We'll discuss how to do that in a minute. However, you'll need to meet the criteria to qualify for an account first. CCU is available to residents of Los Angeles, San Diego, Riverside, and Orange County.
You must reside within this charter area, and your business must have a registered address in the qualifying area. When assessing you for a business loan, CCU evaluates your financial position to create a risk profile for your business.
Your risk profile determines credit limits and loan amounts, and the APR you pay on a loan. CCU looks at the following when assessing you for a business loan or credit facility.
Your FICO Credit Score and Business Standing
The beneficial members of the business (shareholders with more than 255 ownership in the company) will go under review by the loans officer. CCU will examine the personal finances of the member applicants.
The loan officer will look at the applicants' credit score to determine eligibility and Apr charged on loan. You'll need a minimum credit score of 680 to qualify. However, if one of the members has a score under 680, you may still receive loan approval but at a higher APR.
Annual Revenue and P&L Statements
CCU will also review your company's financial health and performance. You'll have to hand over the last two years' financial statements with your loan application. The loan officer reviews the P&L statement and your annual income statement to see if you have the financial health to afford the loan.
CCU isn't interested in loaning money to companies in dire financial straits. They will deny your application if they feel you can't afford the loan. If you're looking for short-term bridge financing to stop your business from collapsing, there are other lenders with alternative solutions for your business.
When assessing your company for loan affordability, the loans officer looks at the company's "debt-to-income ratio." The debt-to-income ratio looks at the amount of money coming into your business versus the outstanding credit facilities and loans you have with lenders.
If the debt-to-income ratio exceeds 30%, you will have to motivate the loan officer to lend you the money or open a credit facility. You'll have to prove to them that you can afford the loan. If you don't have documents to motivate your reason for the loan, CCU may deny your application or offer you the facility at a higher APR than you expect.
Down Payments and Collateral
California Credit Union requires you to take risks alongside it when financing your business. The credit union will not finance 100% of the value of your real estate deals and term loans. You'll need to make a downpayment of between 20% to 30% for equipment term loans and real estate financing.
You can also post collateral for your business instead of making a cash down payment on your loan. CCU will accept other forms of collateral for your downpayment. Speak to your loan manager for advice.
CCU is mostly interested in your financial plan, particularly the P&L and income statements. However, the loan officer will want to see that you have a working business plan.
So, ensure your business plan and financials are up to date to include the loan amounts in your financial projections for the standard loan term.
How Do I Apply for a Loan with California Credit Union?
To apply for a Business Loan or to schedule, an appointment, contact the Business Banking Department at (800) 293-6494. You also have the option of visiting a local branch near you. Your business banking manager will want to speak to you about our loan requirements.
CCU has a team of business banking specialists available to advise you on the proper credit and loan products to suit your business financing.
What Documents Will I Need to Apply for a Business Loan with California Credit Union?
You'll need to complete the application in full when applying for a loan or credit facility with CCU. You'll also need to attach supporting documents to the loan application to help the loan officer with their due diligence on your business and personal finances.
However, it's important to note that before you make a loan application, you must have a registered personal and business account with CCU. You'll need to submit the following documents to open a business account.
- Tax ID: Social Security number (SSN) or employer identification number (EIN) of the sole proprietorship
- Documents: Registration of trade name
Limited Liability Company (LLC)
- Tax ID: EIN of your LLC
- Documents: Formation documents
- Certificate of organization/ formation
- Operating agreement
- Beneficial ownership documentation
- Tax ID: EIN of the corporation
- Articles of incorporation and bylaws; state filing of articles
- Certificate of business name
- Tax ID: EIN of nonprofit
- Articles of incorporation and bylaws; state filing of articles
- Certificate of assumed business name
- Tax ID: EIN of partnership
- Partnership agreement and beneficial ownership documentation
- Certificate of assumed business name
- Tax ID: EIN of organization letter of authority or meeting minutes bylaws
- Beneficial ownership documentation
- Requirements apply to homeowners associations or HOAs
Beneficial owners that have a 25% or more ownership stake in the business. Beneficial owners must provide the following information when opening a business account
- Full name
- Physical address
- Date of birth and Social Security or tax identification number (TIN)
- Percentage ownership in the business
Beneficial ownership identification verification must be completed in-branch, in person. Or you can complete the process with a photocopy of your government-issued identification document.
It takes around two weeks for the business management team to register your account and open it for transacting. At that point, you have access to all the credit and loan products offered by the business banking division, provided you meet the relevant criteria.
If you're applying for business credit cards, you won't need to hand over any supporting documentation. However, for all other loan and credit facilities, CCU requires you to submit the following with your finance application.
- Completed Loan or Credit Application
- Last two business tax returns
- Previous two fiscal year-end financial statements
CCU may request additional supporting documents for larger loan amounts and complex loan agreements.
- Personal Financial Statements for the business owners/guarantors
- The last two years' individual tax returns for the business owners/guarantors
- The latest interim financial statements must not be older than 90-days
- Schedules for all business and personal debts
- Description of real estate (legal and property type) for commercial financing applications
Business loans can take anywhere from six to 16 weeks to receive approval. The time to approval depends on the size and complexity of the loan and the amount of due diligence the loan officer has to do to approve the deal.
Other Qualifying Loan Criteria and Exclusions with California Credit Union Business Loans
California Credit Union works with solvent, profitable businesses, promising startups, real estate developers, and investors. It is not interested in working with companies in bad financial shape and the need for financing to keep the doors open.
So, when filing your application with CCU, you'll have to ensure that your company and your personal finances are in order. If you have any of the following exclusions for finance, you may have difficulty securing finance or receiving a higher than expected APR on the loan or credit facility.
Company Financial Disclosures
The company must disclose its financial position to CCU when applying for a loan or credit facility. CCU will deny the loan application if the company experienced bankruptcy in the last ten years or the beneficial members have a judgment in their name in the previous three years.
Business owners need to submit accurate applications and supporting documents. Failing to provide correct information on the application or omitting supplementing documentation may result in denial of your application or delay in approval.
Outstanding Credit Facilities
The beneficial members and the business are responsible for ensuring they are in sound financial health. If the loan manager feels that the members are financially extended, or the company has too much debt, they may refuse the loan on the grounds that you won't be able to afford to repay it.
Loses and Tax Standing
The loan manager at CCU will require you to divulge any losses sustained by the business in the last two years. The members will also need good financial standing with the credit union, a good credit score, and no judgments or collections in their name.