Promoted by Lumi.
Having launched in 2018, SME lender Lumi is fast making a name for itself in the unsecured business loan space. CEO Yanir Yakutiel explains why he decided to launch the company and the solutions it is offering.
Why did you decide to set up Lumi?
Over the past few years, I had noticed that a lack of access to capital has become an existential problem for small business owners in Australia. Therefore, I saw a real opportunity for Lumi to carve out a niche in the Australian SME space, particularly among hospitality, retail and professional services sectors who are particularly underbanked.
Not only did I want to use the power of data and analytics to create a market-leading, customer-focused lender like no other, but I also wanted to build an innovative fintech platform that would solve the fundamental challenges in alternative lending: access and speed.
Lumi offers industry-leading approval times where applicants receive a lending decision within just one hour. We’ve streamlined the loan application process for small business owners to ensure it is seamless, fast and secure.
No time-consuming paperwork is necessary, and the entire process can be completed online
What kind of loans does Lumi offer?
Lumi offers unsecured business loans from $5,000-$100,000 on flexible terms of three to 12 months. Occasionally, we offer longer or larger loans, but that size range and term are our sweet spot.
To qualify, you just need to be running an Australian registered business that has been in operation for at least six months, producing a minimal gross annual turnover of $50,000.
No collateral is needed to secure the loan, and we are also fully transparent regarding loan pricing, and there is no small print or any hidden fees or charges.
Because our loans are repaid within a shorter time frame (usually in six months), we don’t believe in using an annualised interest rate to describe our loans. Instead, we provide customers with their entire repayment amount upfront, including what their weekly payments will be.
Moreover, Lumi, as a founding charter member of the Online Small Business Code of Lending Practice, provides a SmartBox pricing disclosure document with all of our loans to further assist customers to fully understand the cost of the loan and to be able to compare pricing across different lenders.
How are you utilising big data to benefit your customers?
We have established a very sophisticated data universe, which makes Lumi a very attractive proposition. Lumi was the first pre-revenue fintech business lender to establish a warehouse securitisation program in Australia, which will allow us to have different funding tranches and fund various grades of credit depending on the loan application we receive.
We also combine API accessibility with rich data sources to inform our credit decisioning. We do this by augmenting traditional credit data inputs with the applicant’s social footprint to get a holistic view of the applicant’s ability to service the loan.
This comprehensive credit decisioning algorithm allows us to extract the diamond in the rough from the businesses that banks and other lenders often overlook, therefore helping more SMEs gain access to the vital funding they need to grow their businesses.
Why is the broker channel important for Lumi?
Brokers have been an extremely important part of our strategy since Lumi’s inception. We view brokers, who provide a vital service to consumers, as an important pillar in the financial services and banking sector. Therefore, we constantly work to support all of our brokers and offer tailored solutions to suit their individual business needs.
Currently, the third-party channel is one of our largest origination channels
and is growing at double digit month-on-month rates.
What advice would you give brokers thinking about writing business loans for the first time?
I would recommend partnering with a lender who focuses on making the loan process simple, accessible and fast both for them and their clients. At Lumi, for example, we have an exclusive Broker Portal that allows brokers to submit their leads easily, as well as track their progress every step of the way, including commissions, invoicing and payments.
If a broker is looking at taking that initial step into commercial lending, or simply wants to expand their existing product offering, Lumi is here to help them get the best possible outcome for their clients. Our dedicated BDMs and account managers are here to help them and educate them about our product.
Also, members of our growth and marketing team are here to help the brokers market to their customers so that they can further monetise their customer base and expand their product offering.
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