For most lenders, delivering on such a strong promise might seem unnerving—perhaps even impossible. For the Navy Federal Credit Union, this has been the norm for over 80 years.
Navy Federal’s decades-long record of success can be attributed to two key components. The first is a team that fundamentally believes in the organization and its goals. As Randy Hopper, Senior Vice President of Mortgage Lending put it, “We’re all focused on our members, and we really do believe our members are the mission.” The second is cutting-edge tools that ensure members receive the best service no matter where in the world they may be. This is complicated by the reality that, as Hopper explained, “Expectations are changing, and we have to deliver an elevated experience.” As expectations change, so too do the tools required to ensure Navy Federal continues to provide world-class service.
To address shifting needs, Navy Federal Credit Union has partnered with Blend to spearhead a digital transformation. Together, the two teams have implemented a Digital Lending Platform which empowers credit union staff to provide an unparalleled customer experience through the clients’ preferred platform.
In order to judge the overall health of the borrower, Navy Federal Credit Union now uses “the 5 C’s”: character, capital, capacity, collateral and conditions.
Character. Character examines the borrower’s educational and professional background as well as their personal and business creditworthiness.
Capital. Credit unions like to know that your interests align with theirs. In other words, they feel more comfortable lending to those who are financially motivated to pay them back. When you succeed, so does the lender.
Capacity. Lenders want you to demonstrate your ability to handle a certain volume of work which is required in order to make your business’s loan payments. Capacity is largely based on your business’s current or historical cash flow.
Collateral. In order to insure themselves, credit unions often require the company to possess assets that could be sold in the event of default. Entrepreneurs can use their personal homes as collateral if necessary.
Conditions. Conducting market research will show the lender that your business will succeed under current conditions. The credit union will need to see a business plan that shows an efficient operational strategy, effective sales strategy and, most importantly, sufficient demand for the product or service the business is offering.
Commercial loans are sometimes difficult to assess. This is why LoanBase has created a proprietary system that makes what is usually a difficult underwriting process one that’s clear-cut and succinct.