LAS VEGAS — The product may be a bit offbeat but Forum Credit Union of Indianapolis discovered this year that listening and responding to business customers pays off.
In this case, the product is burial financing and the client is a funeral home which asked the CU for help on accounts receivable financing.
"When they said accounts receivable, we said, 'what'," commented Douglas True, Forum senior vice president, in describing the CU's reaction to the request of Flanner Buchanan Funeral Home which said it was weary of handling the credit paperwork.
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Under the package formally launched in June, Forum is providing a 5% full recourse loan to individuals buying $2,000-$5,000 plots.
Every applicant is approved regardless of credit score with a $50 application fee The funeral home stands behind each loan and if it goes 90 days past due "we take the money from the credit union account of the funeral home to make the credit union whole on the loan," said True.
Forum, which will do the collection, retains the depository account for the funeral home "which is an added benefit," said True who spoke at a break-out session at the National Directors Convention here last week. (See full coverage of the event on pages 18-21.)
Forum, he said, expects to make 200-400 of the loans a month based on the funeral home's forecast.
Flanner Buchanan "receives the benefit of getting paid in full up front so they could reinvest the proceeds into their business," said True.
The funeral home is also relieved of the administrative burden of handling the accounts receivable for the product and Forum "gains new members, new loans and a chance to serve the member with multiple services"
including funeral pre-planning, he said.
True, joined by Rick Rambo, a director of Forum CU, discussed burial financing and other new CU products during a panel session entitled, "Innovation: The Business Case for Risk Taking" at the NDC conference.
Citing the CU's new $25 million headquarters building in Fishers, Ind. as a cornerstone to improve visibility, True said the building serves as a convention center in the Indianapolis suburb, has proven valuable in landing business accounts.
"Chamber groups have their regular meetings in the center, which is the largest of its kind in the area," said True. The 700-seat convention center has been used for civic and business group conferences with the Forum name emblazoned on programs and marketing material.
Over the years the building's cost and its multi-purpose use including an employee fitness center has periodically been attacked by Indiana bankers as examples of CU largesse.
Dismissing the criticism, Forum management has maintained the Fishers facility showcases the CU's role in community life with the building now housing offices of top corporate Indiana businesses including a leading health services provider plus marketing and computer firms.
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