Why Credit Unions Should Offer Sustainable Loans

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Your credit union members, whether they have personal or business accounts with you, are becoming more interested in sustainability. Part of customer service today includes offering products and services that better the local community, and the environment.

There are several trends in the financial sector right now, but two of the biggest include financial inclusion and a focus on sustainable banking and loan practices. Let’s talk about the importance of green financing and sustainable loans.

The Basics of Sustainable Loans

Sustainable loans offer low rates and flexible terms and are intended to help individuals and businesses finance projects that increase the energy efficiency and sustainability of a home, business, or another project.

These loans are part of many green financing initiatives that are gaining popularity in the banking industry.

Green financing and sustainable loans can be used to create funds for projects as big as full-scale corporate climate change initiatives or as small as personal projects to install energy-efficient appliances or equipment for your home

Here are some common projects that often qualify for sustainable loans:

  • Purchase of electric vehicles, charging stations, batteries, and similar products
  • Solar and wind energy technologies (wind turbines, solar panels, etc.)
  • Advanced agricultural projects with goals of water purification, ocean cleanup, desalination, irrigation alternatives
  • Green home renovations including the purchase of energy-efficient appliances, electric and hybrid vehicles, updated insulation, and other equipment that aids in the reduction of personal energy consumption
  • Improved landscaping
  • Energy-efficient door, windows, roofing

Sustainable Loans – Evaluation & Proceeds

The proceeds of a sustainable loan must go to a green or sustainable project. And not only that, but the borrower and lender can also work together to determine the objectives of the loan, the management of the proceeds, and the reporting of results.

For example, if a business is looking to switch their company cars out for electric vehicles, the sustainable loan goals should be to meet certain sustainability objectives.

The proceeds of this loan should also not be mixed in any way with other non-green proceeds. And finally, borrowers should generate and organize data with the most recent findings that speak to the use of these proceeds.

Touting Your Sustainable Services

There are also several ways your credit union can become certified in green financing practices, sustainable loans, and more.

If you want your credit union’s sustainable loan program to flourish, you have to market it to the right people.

Listing your loan types out on your website is great for informational purposes, but it doesn’t draw people or businesses to your new green financing programs.

You can spread the word in a lot of innovative and captivating ways. Partner with local green businesses like solar panel providers, green appliance warehouses, or electric vehicle sellers. Offer information about their products and services, and then include your sustainable loan information along with it.

Celebrate eco-friendly holidays like Arbor Day or Earth Day by offering lower rates on sustainable loans or holding special refinancing events.

The inclusion of sustainable loans is just the first in a long list of effective green financing initiatives you can start building at your credit union. Environmental and social concerns continue to be differentiating factors for members and potential members.

Consumers across industries are looking for businesses that are transparent in their practices and dedicated in their commitments to communities in the local area and around the world. It’s time to start positioning your credit union as a forward-thinking, sustainable brand.

Sustainable Loans Help Your Bank Go Green

Green initiatives have been gaining momentum for decades. The effects of climate change have become more apparent, and banking members have started to put pressure on financial institutions and other businesses to prove they are part of the solution and not the problem.

Sustainable loans, mobile banking, online self-service forms, eStatements, and more digital-friendly options are now becoming a standard, rather than a valuable addition to your credit union offerings.

Offering sustainable loans is a small way your credit union can show its commitment to more green financing practices. And it’s much easier than switching all your branches over to solar power.

As we’ve seen with the great digital transformations spurred by the pandemic, the time to create momentum for future green and eco-friendly practices is now. And it’s much easier to do one initiative at a time than it is to try and “catch up” to other financial institutions’ sustainable practices and eco-friendly building certifications.

Sustainable Loan Applications Made Easy

IMSI’s web loan applications create greater efficiency in your credit union’s lending program. It is quick and convenient for borrowers and allows your staff to focus on member requests that need more of a personal or one-to-one discussion.

Whether you want to start a new green lending initiative at your branch, or just increase your lending capabilities to more members, IMSI has web loan and other applications that integrate seamlessly with your Keystone Core.

Check out our website for more information, or request a consultation today.

Upgrade to Web Loan Applications

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The pandemic has negatively impacted the U.S. economy. Approximately 36.5 million people are unemployed, where three million people filed for unemployment benefits in May. That number is expected to rise as more businesses permanently close and continue to lay off workers. As people consider sources of financing to stay afloat, many will turn to your credit union for a personal or small business loan.

The effects of COVID-19 will have a lasting effect for a long time. Right now, your members are looking for more than just a lender. They are looking for their credit union to provide the services they need with ease. That includes helping with bill pay, financial guidance and emergency loans. 

Web loan applications are designed to collect data, perform automated loan decisions and incorporate your credit union brand to deliver a super user experience. Filling out manual applications is a laborious task and one that’s not easy to do with credit unions relying on drive-thru and digital services for business. Plus, automated technology accelerates the lending process. Regardless of the size of your credit union, a fast loan origination process gives you a competitive edge.

With the technical infrastructure to process online loan applications, your credit union will be able to provide valuable insights into customer needs, reduce risk and simplify reporting, increase productivity and save time and money with each transaction. Loan officers can apply their expertise where it will be of the greatest benefit and shift their attention to value-add services. This becomes vital as small businesses turn to their credit unions for relief, especially with new government assistance programs being rolled out. 

The Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) to provide a direct incentive for small businesses to keep their workers on the payroll. This assistance is vital in expanding access to capital for entrepreneurs, especially underserved borrowers, who contribute to a community’s economy. And, it helps your credit union tap into another product for members.

As a lender, it’s important to look for innovative solutions to adopt with changing times. Without the ability to process web-based loans, you’re missing out on an opportunity to compete with other financial institutions. Borrowers are depending on you to help them in these stressful times. Remove the complications out of the loan application process  and provide easy access for your members.