Listen to our interview with Jim Salmon of Navy Federal Credit Union
Today’s podcast is a look into what one credit union is doing to help small business owners (including start-ups) find the financing and other services they need to grow and thrive. This conversation is a nuts-and-bolts discussion of what to look for in a financial institution as a small business owner. I’m a big fan of what Navy Federal is doing and any veteran looking for a financial institution should look into what they offer to see if it fits with them and their small business.
Information you need, the podcasts you trust, this is the PatrickWiscombe.com podcast network. Bringing you interviews with top business professionals and business financing tips to fuel your American dream. This is The Business Fuel Podcast heard exclusively on Lendio.com. And now, here are your hosts, Ty Kiisel and Patrick Wiscombe.
Sponsorship: This podcast is sponsored by Lendio.com. The online source you need to find the right business financing to grow your company. Check them out for free at Lendio.com to get your business growing right now.
Patrick Wiscombe: Serving over 375,000 listeners each month, this is The Business Fuel Podcast. My name is Patrick Wiscombe. Thank you for tuning us in and taking us along wherever and however you’re accessing the podcast today. If you’re on iTunes, just do a search for Lendio. Or you can stream the audio from Lendio.com/blog. Coming up today, we will be speaking with Jim Salmon from the Navy Federal Credit Union. He’s the VP of Business Services. So give us a little background about who Jim is and how you got involved with Navy Federal Credit Union.
Jim Salmon: I am a veteran. The Navy put me through school. And I became a member and fan of Navy Federal Credit Union way back in college. I did my time in the Navy and went to graduate school. I worked for some Fortune 500 companies. I got involved in the credit union industry as a volunteer official helping manage a credit union for IBM employees. I eventually parlayed the experience into coming to work for Navy Federal and starting a Business Services area for them over 10 years ago. We’re here to provide guidance and services for them whether they’re in the military, veterans, or family members in starting, running, and growing a business.
Patrick Wiscombe: Let’s rewind the clock 10 years. If you could contrast how things were then and how things are now, how have they changed?
Jim Salmon: I think the utilization and embracing of technology has definitely stepped up. We have a lot of small business owners embracing mobile banking and mobile devices. And in turn, remote deposits as well. We also see a lot of business owners, when they are putting their business plans together, incorporating that aspect. They are desiring an online presence and commerce. It opens a lot of doors for small business owners. But it also opens a complexity that wasn’t there 10 years ago. Small businesses owners have to make the decision whether they want to do that or not.
Patrick: I always thought stuff got easier when you implement technology. I never thought about the complexities.
Jim: It opens avenues of explosive growth potential. It opens a door of potential risk you may not have thought of. And it also makes your business 24/7, 365 instead of 8-5, 5 days a week.
Ty Kiisel: I’m a fan of what Navy Federal Credit Union is doing. Back in May, I wrote a couple of pieces for Forbes about innovation in banking. In my opinion, Navy Federal is putting their money where their mouth is. They’re walking the walk, not just talking the talk. About 70% of their small business customers are startups which are super tough people to work with and make profitable. But they seem to be able to do it. So my first question to Jim is, why startups and how are you making it work for you?
Jim: We’re owned by our members. We’re owned by people that come to us for services. In turn, we’re listening to our members and paying attention to what they’re saying.
Ty: What would you suggest to other folks who are a small credit union so they could have a stronger presence in the small business market?
Jim: You have to understand it’s not going to be a panacea for any financial problems your institution might have. It’s a slow process. In dealing with a lot of startups, these folks go into it part time. They have to make the decision if they’re going to use their personal credit cards or do I get a business credit card. Do I use my personal checking account, or do I keep it separate so I know what’s going on? They don’t need a lot of sophisticated products. That’s basically what we’re providing to our customers – services that they’re very familiar with. It hasn’t been easy, but it’s been fun. I have a team of over 30 development officers that speak to these business owners on a daily basis. I think that’s something these community banks have to have out there. You have to have some expertise to talk to these folks. They want guidance and advice. They want someone to bounce ideas off of and point them in the right direction. We’re trying to be advocates as well as advisors and quasi mentors.
Ty: You said a couple of things that resonated with me, advisors and quasi mentors. We talk to lots of small business owners every day and we tell them they have to have their financial house in order. Can you describe how you advise people to be a better borrower?
Jim: Our team has the difficult discussion sometimes of telling people they might not be ready now because of ABCD. So let’s talk about how you can become ready over the next 3,6, or 12 months. For small businesses to make a run at it, you have to have capital to back you up. Small business owners need to realize a lot of the initial money you put into the business, you might not be able to pull out for awhile. You are going to have to keep it there. And also, you’re going to have to keep piling it in. You may start out strong, but you’re going to hit a lull. You have to have money set aside to get you through that lull. Owners have to realize that a lot of the burden has to be carried themselves. Financial institutions can’t always pony up all they need. That’s part of the initial conversation my people have with owners. You’ve got to save up for this and you’ve got to do homework.
Ty: But spending that time with your customers is kind of expensive isn’t it? How does the credit union justify the expense?
Jim: It’s a balancing act. A lot of our members have other products and services with us. You have to invest a little bit of time and effort and in turn, hopefully you will build up some loyalty and they will come back and get more products and services from us. It’s all about the relationship with the credit union in it’s entirety. I want them to use all that Navy Federal has to offer. We want to be the first institution to give these personnel a credit card or a vehicle loan. They remember that.
Ty: You always see the bank billboards that say, “Relationships are important.” But I don’t think any of them are doing what you are. When you say, “Relationships are important,” I feel like you are taking it to another level. You are actually sitting down with a business and taking a little bit of ownership. I think that’s really important and that makes you innovative. How is that received by your customers?
Jim: They are respectful of the frankness. But they know we will work with them. And the fact that they are talking to a designated business professional is very meaningful to them. Overall, the conversations are very good. Some folks are disappointed, but if you leave with a game plan, it’s better than a straight out “no.” If you know 3 or 4 things to work on, that’s better in the long run.
Ty: Do you think that helps them for the next time? Do people take your advice and make the moves you suggest?
Jim: They do. It’s a solid representation of character for these business owners. As business lenders we look at a lot of things, but character is very important. Capital is very important, and cash flow is important.
Ty: You have grown since the recession in 2008. Your business is getting bigger instead of smaller. Are you seeing that it’s getting easier, or is it still a challenge for small businesses to get the funding they need?
Jim: Navy Federal is continuing to grow. And I think a lot of it is positive word of mouth between members. As far as the availability of business credit, the confidence of small business owners has improved. They see sales improving and maybe the potential of adding 2 or 3 employees. Or they see that it might be time to replace equipment or vehicles. They are more comfortable now than they were 2 or 3 years ago. In addition, people’s personal balance sheets have gotten better.
Ty: What do you have to do to be a member of Navy Federal? What’s the qualification requirement?
Jim: We cater specifically to all the Armed Forces and Department of Defense. If you or a family member are affiliated with any of the services, or are with a company that works for them, you probably can join Navy Federal without an issue. We’re going where our members are.
Ty: Jim, maybe to wrap up, how do people get ahold of you? What’s your web address?
Jim: The best way to get to us is online at NavyFederal.org. All the phone numbers for the various regions across the country are there. We are putting a huge effort into updating our online presence and application. We are making it easier and more intuitive for members. Our mobile device applications are fantastic. I also want to mention we have business owners in all 50 states. That’s indicative of how easy it is.
Patrick: We’ll go ahead and wrap up with our guest Jim Salmon. Again, the website is NavyFederal.org. Thanks for coming on the show today. Remember to pick up Ty Kiisel’s book, Getting a Business Loan Financing Your Main Street Business. You have several 5 star reviews on Amazon. Congratulations.
Ty: Thanks. Fortunately there are people who seem to like it. Like I say regularly, “Buy two.”
Patrick: Yes, give them as gifts. By the way, there has been a price drop. On Amazon, it’s now $19.94.
Ty: If you’re looking for financing, it’s a great primer on all the options available. It doesn’t hurt to be educated when you go in. We cover everything from SBA loans to non traditional loans. So check it out and I hope you enjoy it.
Patrick: So for Jim Salmon, Ty Kiisel, I’m Patrick Wiscombe. We’ll will talk to you next week. Thanks for listening.
Bringing you interviews with top business professionals and business financing tips to help fuel your American dream. This has been the Business Fuel podcast, with your hosts, Ty Kiisel and Patrick Wiscombe, heard exclusively on Lendio.com