Citadel CEO Says Small Business Lending Starts Before the Application

Small business lending often begins with discussions centered on managing cash flow, according to Bill Brown, president and CEO of Citadel Credit Union. Rather than focusing on large capital requests, lenders are emphasizing how businesses can better handle money moving in and out of the company. Brown explained that the timing of when money is received and paid is just as crucial as the amount being exchanged.

Many businesses operate on payment cycles that range from immediate to 30 to 60 days, leaving owners responsible for financing the period between delivering goods or services and receiving payment. This often leads to a conversation about obtaining a line of credit, which is typically one of the first borrowing options considered by small business owners.

Despite higher interest rates reducing the appeal of credit, business owners recognize that lower rates observed in recent years are unlikely to return soon. Consequently, lenders and business owners engage in a more deliberate conversation about the purpose of borrowing and how the funds will be utilized to support the business's overall strategy.

For first-time business credit seekers, preparing the necessary financial documentation can be a significant challenge. Brown noted that some business owners may not have appropriately prepared their financial records, such as their balance sheets, receivables, and cash flow statements, before approaching a lender. Credit unions play a role in educating small business owners about their offerings, as some owners may not be aware that credit unions provide both deposit and lending products tailored to businesses.

Traditionally, credit unions were associated with institutions that previous generations used, but now owners are discovering the range of financial services credit unions offer. Furthermore, underwriting practices are evolving beyond a simple credit score evaluation. Citadel Credit Union has transitioned from traditional score-based models to a more comprehensive approach that considers debt-service and repayment capabilities using various evaluation methods.

However, understanding the business model, the owner's strategy, the industry, and the individual putting capital into the company remains essential. Technology also plays a significant role in enhancing the lending process. Digital platforms enable easier interactions while still allowing access to personal bankers, facilitating a more streamlined experience for small business owners.

Citadel Credit Union primarily serves the southeastern Pennsylvania region, and as of the end of 2025, it had over 10,300 business accounts. Commercial loans grew by 14.6% to $474.4 million, while business deposits increased by 11.6% to $357.7 million. Moving forward, Citadel Credit Union aims to address business concerns regarding fraud, improve cash management practices, and introduce new products and services to better serve the needs of small business clients.