Fed survey: Small businesses rate credit unions highest for satisfaction and value
n small business owners secure a loan from a credit union, they are more likely to accept the offer and walk away satisfied than borrowers at any other type of lender. That is the headline finding from the Federal Reserve’s 2026 Report on Employer Firms, released this week, which draws on responses from more than 6,500 small employers nationwide.
The data offer powerful, independent validation of what credit union advocates call the “credit union difference”—the principle that a member-owned, not-for-profit structure translates into better rates, better terms, and a better experience for borrowers.
Curt Long, vice president of data and research and chief economist at America’s Credit Unions, said the report contained several encouraging findings for the industry. Long noted that credit union borrowers were the most likely to accept loan offers—a strong signal that credit unions are extending more competitive rates and terms than other lenders—and that they reported the highest satisfaction of any lender type in the survey.
Borrowers vote with their signatures
Among small business applicants approved for at least some financing, 94% of credit union borrowers accepted the offer, the highest rate among lender categories. Finance companies came next at 90%, followed by small banks at 89%, large banks at 87%, and online lenders at 84%.
That gap matters. An acceptance rate is a market signal: when borrowers walk away from an approved loan, it usually means the terms were not competitive. The fact that credit union applicants almost universally follow through suggests the offers they receive align with what small businesses actually need.
Satisfaction data reinforce the point. Seventy-six percent of credit union borrowers said they were satisfied with their lending experience, compared with 65% at small banks, 64% at large banks, 57% at finance companies, and just 35% at online lenders. Only 3% of credit union borrowers reported dissatisfaction, the lowest figure in the survey. Among online lender borrowers, dissatisfaction reached 15%.
Online lenders gain ground on volume
The report also surfaces a challenge. Credit unions’ share of small business loan, line-of-credit, and cash-advance applications slipped to 7% in the 2025 survey, down from 9% the year before. The shift was not driven by a migration to banks; large bank application share edged up to 41% after dipping to 39% the prior year, while small banks ticked down to 28%.
Instead, the growth belongs to online fintech lenders, whose share of applications has climbed from 17% in 2020 to 29% in 2025—a five-year surge that has reshaped the competitive landscape. Long noted that the gains by online lenders have come at the expense of small banks, who have seen their share slip by 11 percentage points over that period.
The Fed’s data suggest that speed and convenience, not quality, are driving that trend. Sixty percent of online lender borrowers reported that actual borrowing costs were higher than expected, compared with 37% at small banks and 32% at large banks. High interest rates and unfavorable repayment terms were the most commonly cited challenges among online lender applicants.
Turning a quality advantage into a broader reach
For credit unions looking to grow their small business portfolios, the Fed data provide both a mandate and a roadmap. The mandate is urgent: online lenders are not winning on quality, but they are winning on visibility and ease of access. The roadmap is the data itself—credit unions can point to the Federal Reserve’s own survey to show prospective small business members that borrowing from a credit union means better terms, lower costs, and a higher likelihood of a positive experience.
The 2025 Small Business Credit Survey is a collaboration of all 12 Federal Reserve Banks and collected responses from 6,525 small employer firms between September and November 2025. Detailed findings, including data appendices, are available on the Fed Small Business website.
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