This research seeks to document if differences in perceptions of small business creditworthiness and lending practices of credit union and commercial lenders exist. This study applied a quantitative method to answer five questions: (1)How do small business owners perceive commercial lenders? (2)How do small business owners perceive credit union lenders? (3)How do commercial banks perceive small businesses? (4)How do credit unions perceive small businesses? (5)What are the differences in the perceptions of small businesses, commercial banks, and credit unions? The study used a quantitative survey instrument to gather data and the data was compared and contrasted among groups (Fitzgerald & Rumrill, 2004). The chi-squared test of differences in probabilities and the goodness of fit test were applied (Figure 2A) to determine if there were differences in probabilities between answers.

The results of this study are significant to small business and banking leaders by helping to define how lenders’ and small businesses’ perceptions affect the differences in loan delinquency rates between commercial lenders and credit unions lenders and by offering new insight into how loan delinquency rates can be reduced. The results also pointed to inherent perceptions of small business owners and lenders that might contribute to the root causes of loan defaults and delinquencies. The results provided information upon which small business owners and financial institution loan officers might act in order to understand how to better manage loans and to reduce the rate of loan delinquency.