The Four Elements of a Market-Leading Commercial Lending Product

Experienced sales leaders often remind their teams that good looks and charm have a short shelf life. A pitch can be dressed up with smooth talk and showmanship, but what truly matters to a prospect must eventually be discussed:the substance and strength of the product itself.

This article explores how commercial lenders (banks, credit unions, equipment finance firms, and specialty lenders) can ensure that what they offer is not just competitive but genuinely differentiating.

Relationships matter…but they’re not enough

Top‑tier salespeople in any industry know that relationships drive business. Their customers follow them from company to company, regardless of the logo on the business card. It comes as no surprise that employers insist on non‑compete and non‑solicitation agreements:  they understand the importance of retaining those relationships.

But even the strongest relationships have limits. A salesperson who joins a commercial lender with a flawed product will eventually feel the impact and so will their clients.

In commercial lending, the product is not a brochure or a brand promise. It is a combination of four core elements:

1. Credit Appetite
2. Pricing / Rate
3. People
4. Process

Reputation, culture, longevity, marketing, and leadership can strengthen a lender’s position, but they do not define the product itself.

Many institutions assume that credit appetite and pricing are the core of what they offer, but stopping there creates blind spots. People and process are critical to the product’s real‑world application and performance.  Overlooking them diminishes competitiveness in ways no credit policy or pricing strategy can overcome.

Let's look at each.

1. Credit Appetite

Credit appetite is a byproduct of an institution’s risk appetite which defines the enterprise‑level tolerance for volatility, loss, and uncertainty across all activities, not just lending. * Risk appetite is the overall risk posture that guides how the credit box should be shaped and managed. Credit appetite is the transaction‑level and portfolio‑level guidance for the types of borrowers, industries, and collateral profiles a lender is willing to accept.

It answers questions like:

1. What industries do we target or avoid
2. What financial ratios must borrowers meet
3. What collateral types and advance rates are acceptable
4. What deal sizes, terms, and structures fit our model
5. What concentrations are we comfortable with

Credit appetite is one of the defining characteristics of any lending institution. It signals how willing the firm is to put capital at risk and shapes the markets it can credibly serve.

Lenders sit on a spectrum:

• Conservative lenders prioritize pristine portfolio quality, low delinquencies, and minimal charge‑offs.
• Higher‑risk lenders will accept higher risk in exchange for broader market reach.

Neither approach is inherently superior. What matters is clarity and alignment with the next element.

2. Pricing / Rate

Pricing is the outward expression of any lender’s strategy.  It reflects funding costs, overhead, credit reserves, and the institution’s required return on capital.

Alignment with credit appetite is non‑negotiable:

• Conservative lenders must price their offerings to attract high‑quality borrowers. This demands depository-level funding costs. Margins will be thinner, but volume and credit performance compensate.
• Higher‑risk lenders must price for the losses they expect to absorb. Higher expected losses naturally push rates above the market because those losses flow through the allowance for credit losses on the balance sheet and through provision expense and charge‑offs on the income statement. These items reduce earnings and capital, requiring materially higher yields simply to maintain target returns.

3. People

This includes everyone affecting the customer experience: sales, sales support, credit, operations, customer service, collections, and in some cases accounting.

Most lenders employ good people. Sales teams routinely praise their back‑office colleagues as a competitive advantage and they are often right. But when every competitor can make the same claim, “good people” become table stakes rather than a differentiator.

People become a true competitive weapon only when paired with the fourth element.

4. Process

Process is the least glamorous but most underestimated component of the lending product. It encompasses the steps, handoffs, timing, and embedded rules that determine how business gets done. It covers everything from how a transaction is originated, underwritten, documented, funded, and serviced.

Process excellence should be treated with the same seriousness as strategic planning. Yet many institutions let their processes age untouched for years, relying on the dangerous mantra: “Hey, it works.”

But nothing in business stays constant. Markets shift. Regulations evolve. Customer expectations rise. Workforces become more distributed. Automation unlocks new levels of efficiency, but automation alone cannot fix a broken process. As we remind our Endurium clients: fix the process first, then apply technology. Otherwise, you’re simply painting over mold.

A modern commercial lender should review and refresh its origination process every three to four years, ideally with the help of an objective third‑party partner and the full-throated support of the CEO and board.

Questions Every Candidate and Every Employer Should Ask

Sales, credit, and operations professionals evaluating a prospective employer should ask:

• When was your origination process last renewed or redesigned?
• How is technology deployed to reduce friction for customers and employees?
• Is process excellence a core discipline or an afterthought?

These questions do more than impress an interviewer. They reveal whether the company’s product is truly marketable, and whether your time and talent will be well spent.

Employers should ask themselves the same questions. A strong product attracts strong talent. A weak product repels it.

The Real Keys to a Market‑Leading Product

All four elements matter and every financial institution will highlight these components in its own way. But regardless of which element takes center stage in a given conversation, the key to determining competitiveness lies in the following:

• Alignment between credit appetite and pricing
• A relentless commitment to process excellence

In a market reshaped by artificial intelligence, rising customer expectations, and accelerating competition, lenders cannot rely on legacy strengths or past performance. They must rethink their product with fresh eyes and the courage to challenge long‑held assumptions.

The institutions that do this well will not just compete, they will lead.

*Beyond lending, risk appetite addresses questions such as:

• How much earnings volatility can we tolerate
• How much capital are we willing to put at risk
• How aggressive or conservative should our growth targets be
• How do we balance credit risk with liquidity, interest rate, operational, and compliance risks