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Consumers always benefit from choice in the marketplace. Small businesses are no different; that applies to their financing options, too. It’s a point worth remembering during this National Small Business Week. And it is an important reason Congress should stop delaying and pass legislation to raise the arbitrary cap that now constrains credit unions’ small business lending.

While some don’t realize it, credit unions have a long history of making small business loans, and today a third of the nation’s 7,600 credit unions offer them. Still, credit unions are only a small share of the business lending market — about 5% among depository institutions at year-end 2010. Banks have the other 95%

Yet banker opposition has been the stumbling block to advancement of this credit union small business lending bill — which, should it pass, would still barely dent the banks’ dominant share of the market.

The focus here really ought not to be on banks, but on what is best for America’s small businesses. And what’s best is choice.

During the financial crisis and ensuing recession, banks dramatically curtailed their small business lending. Credit unions, which did not suffer anywhere near the problems the banks did, were able to keep lending. That pattern has continued even as the economy has improved. From the start of the financial crisis through December 2010, small business lending at credit unions grew 38% while bank small business lending declined 11%.

All the while, credit unions experienced fewer loan write-offs (their average net charge-off rate of 0.19% since 1997 is less than one-fourth the banks’ average rate of 0.89%). Credit unions were then, and continue to be, a viable option for small business owners. And in a market dominated by mega-banks, credit unions are still local.

Consider the example of Robin Pharo, who owns a building-design consulting firm near Madison, Wis. Last year she sought a then-popular automatic rate cut (ARC) loan, a type of zero-interest loan that became available under the federal stimulus program. Two banks she approached declined, saying these loans didn’t generate enough revenue to make it worth their while.

Ms. Pharo recognized the bank had little financial incentive, and stressed that she was willing to transfer her entire book of business over to the bank — line of credit, business credit cards, business checking, the works. Both banks still declined, and so she turned to Summit Credit Union in Madison, where her experience was 180 degrees different.

She told the Summit loan officer the same thing: yes, this loan wouldn’t be particularly profitable but she also intended to use the credit union for her other business services. “And she (the lending officer) stopped me right there and said, ‘Oh my goodness, we’d be happy to do an ARC loan for you. We don’t care if you bring your book of business over. We’d love it if you do, but (this loan is) going to make sense for you, and that is who we’re in this business to serve.”

That last point is worth repeating: “You are who we are in business to serve.” That is the perspective typically found at credit unions, which are financial cooperatives owned by the members they serve. And, as the head of the national trade group for credit unions, I hear anecdotal examples like Ms. Pharo’s with regularity.

For similar reasons, when the U.S. Small Business Administration chose this year’s Lender of the Year for rural and community loans, the award went to a credit union, Centris Federal Credit Union in Omaha.