Outside-the-box solutions prove beneficial
This article was produced in partnership with Lumi.
Lumi’s head of third party John Clifford talked to Mortgage Professional Australia’s Tracey Prisk about how SMEs are impacted by the current lending climate.
In a business landscape marked by inflation, rising interest rates, lower consumer spending, staff shortages, and wage increases, a new report has revealed that 76% of SMEs believe their cash flow will be adversely impacted by these market conditions.
According to a report released by Small Business Loans Australia, some SMEs are battling to stay afloat.
Lumi head of third party John Clifford (pictured above) said his company was on a mission to empower Australia’s SMEs who were having trouble securing finance from traditional lenders by offering fast, fair, and flexible funding solutions, with the use of its innovative lending technology.
Clifford said his company realised that one size didn’t fit all when it came to SME lending, especially in the current economic environment.
“Instead of just ticking boxes, we like to ‘lend outside the box’, by offering bespoke and flexible funding solutions to suit each business’s unique needs,” Clifford said.
“We constantly innovate and tailor our products to the ever-changing needs of our customers and partners allowing us to offer a cutting-edge lending experience based on a realistic and fair credit assessment. This makes us not only a reliable, but also a sustainable, lending partner.”
Lumi is a partner-led company that writes loans across the risk spectrum. “Thanks to Lumi’s credit decision algorithm, we can look at the bigger picture and make responsible credit decisions based on more than just a business’s credit score.
“This allows us to fund a much wider range of businesses and opportunities because we’re able to tailor our credit policies to different industries, including the more volatile ones such as construction, F&B (food and beverage) and retail.
“In fact, approximately 50% of all loan applications that we assess every month are within those industries because we understand them better and have an appetite for them.”
Clifford said F&B and retail were usually considered challenging industries.
“However, based on our credit-decision approach we found that cafés and restaurants that were funded by Lumi are performing really well and are actually one of our preferred industries.
“Similar to construction, which is a non-preferred industry for many lenders, Lumi managed to build a healthy portfolio in that sector too. There are very few exemptions of industries and businesses we really can’t fund.”
According to Clifford, there's a perception in the market that Lumi is only a premium lender and that is not the case.
“We are flexible and able to offer loans to a wide range of customers,” he said.
“We want our customers to thrive not just survive, therefore we reward lower risk with a better price without leaving higher-risk businesses behind.
“That’s exactly why we recently launched Lumi Rate EaseTM – Australia’s first rate-reducing business loan for those who need it most – to alleviate the pain of rising interest rates.”
Clifford said this unique feature allowed businesses that were paying a higher interest rate, due to their financial circumstances, to gradually drop their rate every month and save thousands in interest, simply by making their repayments on time.
“We also recently launched our improved and truly revolving line-of-credit with extended terms of up to five years, and the no-drawdown fees or ongoing costs,” he said.
“Our new, improved, low-fee business line-of-credit gives customers full transparency on their repayment schedule, so they know exactly how much they need to repay at any given time.”
Lumi’s mission is to shake up small business lending by providing fast access to finance that’s fast, fair, and flexible. For more information about Lumi visit its website.
