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Short on cash? Local credit union helps with new Bicycle Loan program

Posted by on May 16th, 2008 at 4:58 pm

On test: The Electra Amsterdam

Picture yourself on a new bike?
How about a bike loan?
(Photo © J. Maus)

Portland-based Unitus Community Credit Union has announced the creation of a bike loan program.

According to Tracy Streebel, business development officer with Unitus, the new Bicycle Loan will allow any member of the credit union to borrow money to put toward the use of a bicycle or any related accessories (like cargo trailers, components, etc…).

“I wanted to find a way to improve the health of our community and I realized the bike community would be a great place to start.”

The Bicycle Loan will be offered at a fixed-rate of 7.999% APY for a 12 month term with a minimum of loan amount of $250 and a maximum of $2,500 — just the right price for that custom bike you’ve been drooling over.

To create awareness for the product, Unitus will use a network of “preferred dealers” — bike shops that have been authorized by Unitus to offer the loan. Streebel says she has already set up relationships with Sellwood Cycle Repair, Seven Corners, and custom bike builder Sweetpea Bicycles.

Streebel welcomes interest from other bike shops interested in the program. You can contact her at TStreebel [at] unitusccu [dot] com.

Several months ago, Streebel contacted individuals and groups in the bike community, hoping to “build relationships and figure out some of the community’s needs.”

The idea for the loan first came up during conversations between Streebel and Angela Koch, director of the Safe Routes to Schools program for the Bicycle Transportation Alliance.

“During a meeting with Angela, we were talking about kids and how Unitus tries to teach them financial literacy,” says Streebel, “and Angela told me about their Walk and Bike to school programs. Eventually, she asked if we had a bike loan program.”

After that, Streebel took the idea and pitched it to the upper management at Unitus. “They’ve been supportive of it all along and I’m amazed at how quickly it’s gone through development to reach the point where it’s nearly ready to launch.”

To be eligible for the Unitus Bicycle Loan, you must be a member of Unitus, live and/or work in one of seven surrounding counties (Clark, Yamhill, Marion, Polk, Clackamas, Multnomah, Washington), have $5 in a savings account at all times, and have a checking account with direct deposit and automatic payment.

Unitus will have an informational table at the BTA’s Walk and Bike Challenge event on June 8th and they will be ready to accept applications at BicycleLoan.com by early summer.

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Keith
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Keith

Yay!!…thats my credit union.

chris
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chris

8% APR. yay.

Schrauf
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Schrauf

Not bad. Might not get a much better rate for an automobile when you finance through a bank, as opposed to a subsidized rate through the manufacturer. You also have to consider that the collateral – the bike – possibly depreciates faster and is tougher to resell for a good price, in comparison to a vehicle.

I would think most bike shops also offer some type of financing. Maybe not, if most people just use credit cards.

Now we just need decent insurance available for cyclists who do not drive.

Crash N. Burns
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Crash N. Burns

Back when I was young we had to SAVE money for bicycles. Up hill both ways even!!! Lots and lots of dirty dishes had to be washed to afford my first nice ride. Now these young sprites act like they don\’t even need gears. Sheesh, what I would have given to have some gears on that old skip-tooth. Did I mention it was uphill both ways?!? Anyhoo, to bad this here loan weren\’t available back in the day. Coulda\’ had my sweet ride alot sooner…

Scott H
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Scott H

Win!

Qwendolyn
Guest

No, APY.

Which is different.

…just sayin\’

Qwendolyn
Guest

Also, this is really cool. You can finance your car, why not a bike?

I dig it.

Paul Manson
Guest
Paul Manson

Would be cool just to setup a solely bike based credit coop. Small investments could be made by cyclists with cash to finance cyclists without cash. Pass that interest back to the investors as a nice yield and increase buying power for new cyclists.

Todd B
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Todd B

Thanks Unitas (and Tracy) for thinking towards the future.

It has always galled me that my credit unions are always sending me car loan offers and using our membership resources to not be sustainable in a transportation sense (offering cheaper loans for car purchases).

I will now consider looking at Unitas when I shop for my next credit union,

After visiting their site…though I wonder why Unitas is offering lower rates for used RVs than bikes? I would think that most bikes in Portland have a higher resale value, especially one worth taking a loan out for.

Keith
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Keith

That sounds allot like prosper.com which is a really neat ideal. Only more focused on
cyclyculture. Could be a score.

BikeBillboards dot blogspot dot com
Guest

There is something unseemly about bike loans, bordering on loan sharking. I actually get a whole lotta kick out of holy-than-thou comtemptuous pity on all the rig-a-malo motorists go through just to get around town.

A bike that cost more than a full tank of gas is OBSCENE.

Tbird
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Tbird

Sweet!
hmm, Does that mean since the bike is financed that insurance for cyclists will be available?

Dabby
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Dabby

There has been financing offered for bicycle purchases at Portland Bike shops for many many years.

I recall being offered it at both Lightning Speed and Ciclo, when they were in old town. I believe it was a decent rate, through American general.

By the way, let\’s not even start with insurance for bicycles, which, by the way is also available in many different forms, including renters and home owners insurance packages.

I recall being well paid for a used Torelli, twice, by the same company, in the mid 90\’s.

Tbird
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Tbird

Actually I was asking about insurance for cyclists. ( the folks on the bikes )
🙂

Jacob
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Jacob

There\’s also a TREK card that has a limit up to $3000 and has 0% for six months after the bike purchase. The only issue is that you have to purchase at an authorized trek dealer, but you don\’t have to buy a trek and the limit can be used toward accessories.

zilfondel
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zilfondel

\”A bike that cost more than a full tank of gas is OBSCENE.\”

Back in \’98 it cost $10 to fill up my Honda. Today, that\’s almost $40. Your bike cost less than that?

BikeBillboards dot blogspot dot com
Guest

#16, zilfondel, yes, my bikes cost less than $10. It\’s NOT the bike. It\’s ALL about the MOTOR.

Zaphod
Guest

\”A bike that cost more than a full tank of gas is OBSCENE\”

I *totally* agree. I\’m going to march right down to all the custom frame builders here in Portland and tell them how obscene they are. I need to yell at Chris King too, the nerve to build environmentally friendly components that never break. I could have two or three non-obscene bikes for the price of a headset.

Dan
Guest
Dan

@#17

\”All about the motor\” is true to some extent. Lance wouldn\’t have any problem cleaning my clock on a garage sale beater, no matter what I was riding. But I can pretty much guarantee that you will have a lot more fun on something a little nicer.

Yes, that does mean spending more than $10 – even more than $40 – on your ride. But then on the other hand, my commuter is 9 years old and still going strong – I have no problems finding compatible parts, and expect to be riding it another 10+ years. It\’s well worth paying a little more on the front end for something that\’s actually fun to ride, and that will last you 10+ years. I think if you give something nicer a shot, you might agree.

ralph
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ralph

Just remember that the financing from the dealers that offers 0% for x months is deferred interest. Interest is accumulating during the interest free period and is added to your account after the interest free period has expired.

I\’ve seen these rates run in the 20 to 25% range.

It pays to read the fine print and know what you are getting into.

mark
Guest
mark

that\’s a great idea, however the maximum should probably be a bit higher. You can get a nice bike for $2500, but if you look around, most upper end new bikes don\’t even start out under $2500. You can get a car loan for $50k, most people I know spend more on a bike than a car. (not $50k, but still, it\’s easy to find someone who spent about $6k on a bike. especially the local made hand-built ones)

Angela
Guest

Thank you SO much Tracy for all your hard work in making this happen!

I think it\’s important to remember that there are many families out there who have more than one person that they\’re trying to transport by bike. That can make family cycling a bit of a challenge when you add up all those costs and that\’s why the idea is so valuable to me, my husband and two girls. I would much rather pay a fair interest rate on the equipment needed to outfit us with completely than rely on whatever sort of sharkiness is out there trying to get me into a new or used vehicle!

Now, I still use my trusty one bike and tank of a trailer (the sassy red one with rainbow stripes and purple fringe!) to get around, and we also have a tag-a-long when I\’m not commuting through downtown, but there would be no other way that I could explore more efficient, lighter, interesting, funner set ups if it weren\’t for the option to consider financing. And I also wouldn\’t be considering treating myself to a Sweetpea now!

In my work I meet countless families who are far more likely to keep on going by car because making a monthly payment just makes life easier and saving a bunch of cash or using a higher interest financing means (such as a credit card) is darn near impossible.

As for the insurance bit, someone else take that ball and run with it. Lesson learned here: this would not have happened if the question hadn\’t been asked to the right person at the right time!

Once again – thanks Tracy!

wsbob
Guest
wsbob

It\’s good that banks are now starting to make a bigger business of providing loans for bikes. At the same time, I hope a whole new generation of commuters is not being conditioned to believe they have to have a $2500 to $6000 bicycle to get from home to work and to the store.

Bikes and bike craftsmanship as art or whatever, is fine, but taking people\’s minds away from the reality of what\’s required for good transportation doesn\’t seem too smart.

E
Guest
E

Loans generally don\’t \”help\” anyone. However, it\’s nice to see the loan industry begin to sit up and take notice. The more businesses/organizations that pitch their crap to us, the more power we have in the community.
🙂

scdurs
Guest
scdurs

\”Loans generally don\’t \”help\” anyone.\”

I agree. Save your bucks and pay cash. Don\’t become a slave to a lender. The only good thing about this deal is that it\’s offered by a credit union at a decent rate. Better to get a loan from them than to put it on a credit card and pay some horrendous rate.

If you really can\’t afford a bike, the Community Cycling Center can help you get a re-conditioned used bike. They have a program called \”ADULT EARN-A-BIKE: CREATE-A-COMMUTER\”

http://www.communitycyclingcenter.org

Jessica Roberts
Guest
Jessica Roberts

This is a good thing for major purchases; I have been thinking about buying a bakfiets, but because I don\’t have a car to sell to finance the purchase, it would be challenging to come up with $3K in cash. Not impossible, but having this as an option is very helpful.

The other thing this helps us car-free folks do is establish a credit history. Because my sweetie and I sold our car many years ago, and in general don\’t use credit cards, we were very disadvantaged when it came time to buy a house. I think this is a fantastic option for bike-loving people to use (responsibly and after considering their financial position, natch) to bolster their credit score.

Donna
Guest
Donna

Does the Create-A-Commuter program still require a referral from a social services case manager?

If so, that\’s a barrier right there.