The $1.2 billion Numerica Credit Union in Spokane, Wash., is now using an automated software program to help jump into commercial and industrial lending, an area of untapped potential for many credit unions, the credit union said.
Healthy growth in its asset-based commercial lending has encouraged Numerica to branch into these more service-intensive loans, said Alan Woodruff, the 94,000-member credit union’s business services relationship officer.
Numerica actively pursued asset-based commercial loan customers in 2012, Woodruff said. “We actually doubled our goal of adding $35 million, to $70 million in new business,” he said.
The areas Numerica serves, in western Washington and northern Idaho, are experiencing about the same level of economic growth as the rest of the U.S., Woodruff said.
“Growth has been slow, and unemployment is still an issue for us,’’ he said. But that tepid economic backdrop hasn’t stopped the credit union from looking for new business opportunities, he said.
Woodruff got a call last year from BBC Easy, a Seattle startup company offering an automated program to process and manage C&I loans, including borrowing base certificates.
Woodruff, who has worked in business banking and commercial lending for 15 years and joined Numerica six years ago, said the BBC Easy program made sense.
In July, Numerica became the first credit union to sign a contract with BBC Easy, said James Walter, the young company’s CEO.
He said BBC Easy has a number of credit union customers in the pipeline, at various stages of testing. BBC Easy also has customers at other financial services providers and in other industries, Walter said.
BBC Easy provides software that automates the loan set-up and record- keeping processes and stores all the records. Loan customers can pull up a dashboard screen on their computers, which facilitates filling out updated information through borrowing base certificates and then submits information electronically to the lending officers. That cuts down on the time and potential errors that occur with handing printed, faxed and scanned documents.
The lender sets parameters for loans, including how often the borrower must update information. Financial institutions that already have C&I parameters in place can set up the BBC Easy dashboard to fit their existing loan programs, the company said.
For institutions new to the business, such as Numerica, BBC Easy helps design a program from scratch. Woodruff said the Numerica program was up and running in hours and can quickly be scaled up to handle more members.
For Woodruff and his staff, the program has freed up their time to attend to their primary work, meeting with members, rather than checking paperwork, he said.
As a business that’s based in the cloud, BBC Easy is careful about security, said Walter, a former program manager as Microsoft who said he has headed several other startup technology companies.
“Our files are encrypted both in storage and while in use,” he said. The software program can also flag unusual activity that might signal fraud.
“Since C&I loans, are based on liquid assets, such as inventory, rather than hard assets, things are constantly changing,” said Corey Ross, vice president of sales at BBC Easy. Paperwork typically is updated once a month, but it can be done weekly, or at any time.
Computer power really comes into play with data mining. “At a typical credit union, the loan officer takes down all the information, stashes it in a file behind the desk, and moves on to other things,” Ross said. “With BBC easy, you have all that information available to use at any time.”
Data mining from customer accounts offers many business opportunities, since the loan department can look across its whole portfolio of borrowing base certificates to identify positive and negative lending trends and adjust its strategy to any changes.