A group of five credit unions have signed on to a new program in which they’ll partner with employers to offer small cash loans that don’t require a credit check.

Those involved say one of the primary missions of the initiative is steering people away from payday lenders, which have a reputation of creating a cycle of debt that’s difficult to overcome.

“Before you know it you’ve got two or three people you’ve got to pay back,” said Michael Plath, executive vice president of Toledo Metro Federal Credit Union, one of the participating institutions. “That person feels like there’s no way out.”

The Employer Sponsored Small Dollar Loan Program offers loans ranging from $300 to $1,500 to employees of participating businesses and agencies. The loans come from the credit unions, while the role of employers is fairly limited — they verify income and set up automatic withdrawals from the employee’s paycheck to be funneled to the financial institution to repay the loan.

“Our goal is to try and get employers to understand that you don’t have any risk,” Mr. Plath said. “All you get really is good publicity to say we’re offering the program to our employees to have access to more affordable financial products and services compared to what they may otherwise find in the marketplace if left to their own devices.”

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