Lumi Finance Review
This Lumi review will allow readers to improve their understanding of what Lumi Finance can offer their business as an online lending provider. We will share a full breakdown of who Lumi Finance are; including Lumi’s recent launch, the pedigree of their CEO and what Lumi’s clients have to say about the company. As usual, we will provide full details of what Lumi looks for in a potential borrower. Read the following Lumi review to make the right decision as to whether Lumi is the best lender for you.
Lumi’s Flexible Funding Offer for 2022: Receive a business loan through Lumi and borrowers can pause loan repayments for 4 weeks, interest-free, at any time, to focus on their business.
|📝 ABN:||47 154 775 667|
|📝 Credit License:||154 775 667|
|💰 Loan Amount||$5,000 – $500,000 (Unsecured up to $300,000)|
|⏲️ Loan Term||3 months – 36 months|
|💸 Unsecured Loans?||Unsecured Loans are Available|
|⌚ Lender Requirements|
|📃 Required:||Driving License Number|
Your ABN Business Number
Bank Account Number – either integrate automatically online or send PDF bank statements
|⏱️ Response Time:||2h for approval.|
|🌝 Easy to Apply:||Yes, fully online (expedited application here)|
|💌 Online Reviews:||100% positive but small sample size|
|🏆 Awards and Recognition:|
|💳 Minimal Interest Rates:||On a $100,000 loan over 12 months, the total repayments, including all fees, would be $110,498.96.|
Lumi also offers a line of credit.
|⚖️ Compare Lumi||Compare Lumi with 50+ Australian Lenders on Lend.com|
|Review Table of Contents|
Overall Rating: ⭐⭐⭐⭐⭐
Credibility & Company Story
In Detail: How Lumi Started
Compared to Prospa and Capify, Lumi is still relatively new to the online lending scene in Australia for small business. But that doesn’t mean the company comes without experience. Lumi was founded in 2018 by its CEO Yanir Yakutiel, the previous founder of the fintech and small business lender Sail Funding. Along with Yanir, another 13 team members of Sail made the move to Lumi. Having generated quite a big buzz in the Australian market for Sail, Yanir raised even more funding for the ambitious Lumi.
In its first funding round Lumi raised an impressive $31.5m. With $25m funded as debt and provided by the specialist credit investment firm Arbel Fund, based out of Israel. The other $6.5m raised as equity was sourced by Australian investors including the Josh Liberman Investment Group and VC firm The Seed. Lumi’s CEO Yanir Yakutiel spotted a hole in the market.. “We saw a real opportunity for Lumi to carve out a niche in the Australian small business space, particularly among hospitality, retail and professional services sectors, by building an innovative fintech platform that is solving the fundamental challenges in alternative lending: access and speed”.
Shortly after its first funding round, Lumi raised an additional $8m in funding through equity in 2019. Impressively, most of this additional funding came from existing equity holders increasing their support, with only a small percentage from new investors. At the time of the announcement, Lumi boldly announced that it aimed to increase its loan issuance to small businesses by up to $40m a month and double the size of its staff over a one year period.
In late 2021 Lumi raised a further $20m. A large portion of the funds was again raised by the Josh Liberman Investment Group, with Perennial Partners also joining as a strategic investor. In the fundraising announcement, Lumi confirmed it had reached its prior goals to double the size of its funding facilities and double the size of its staff, taking the overall headcount to over 60 employees. The company also provided a strong hint that product diversification was in the pipeline.
In early 2022 the firm raised another $10m, meaning Lumi raised $30m in the space of just a few months. CEO Yanir Yakutiel had this to say: “We are growing much faster than forecast, which is ultimately why we have raised additional capital so soon after the last round to help fuel this growth… we are now truly beyond any ‘start-up’ label or mentality and will be heavily investing into every aspect of our offering to start to challenge the status quo of small business lending across the nation.”
There’s certainly no shortage of ambition at Lumi and the firm is looking to increase its loan issuance to small businesses by up to $40m a month.. The ultimate aim, to reach the number two spot in the Australian small business online lending market behind Prospa, and a potential IPO.
Headquartered in Sydney, as of January 2023, Lumi employs over 60 people.
Credibility Score: ⭐⭐⭐⭐⭐
What Finance Options Do Lumi Offer?
In the space of the last 12 months, Lumi has expanded its offering. Notably we can see it has:
- Increased the total amount borrowers can receive through a small business loan via Lumi from $300,000 to $500,000 (when the company first launched loans were capped at $200,000 so it continues to go from strength to strength).
- Increased the maximum duration that borrowers can take a business loan from 36 months to 48 months (more than double the 18 months the firm originally launched with).
- Doubled the maximum limit of its line of credit facility from $250,000 to $500,000.
- Launched the unique Lumi Lux™ Rate-Reducing Business Loan
When Lumi originally launched, they didn’t want to overcomplicate things with a bunch of lending solutions, just straight-forward business loans that were designed to be both simple and transparent for clients.
And whilst Lumi has added other strings to its bow in terms of its lending solutions, the recent launch of a business line of credit and the COVID kickstarter loan is still very much with simplicity in mind.
Small Business Loan
A straightforward loan with a quick application. Low doc and unsecured loans are available up to $300,000 (just recent bank statements required). With up to $300,000 available unsecured, this is higher than Prospa’s $150,000 cap on unsecured lending.
Business Line of Credit
No guesswork and no hassle, just a business credit line available for SMEs to tap into, as and when it is needed. Simply agree to the total size of the credit line and drawdown anywhere between $2,000 to $500,000 when your business needs the cash. Allowing businesses to manage cash flow shortages or cover surprise costs until they have the funds.
Lumi Lux™ Rate-Reducing Business Loan
In a first of its kind, the Lumi Lux Rate-Reducing Business Loan just does as the name suggests. For loans above $200,000 Lumi will reduce the cost of the loan by 25 basis points (0.25%) every 6 months, up to a maximum of 2% (APR) drop. To qualify, you have to keep up-to-date with repayments.
Lumi Kickstarter Loan
The Lumi kickstarter loan is specifically targeted at small businesses who can prove a loss of revenue due to COVID restrictions. The facility takes into account both pre and post covid revenue so that Lumi can assist businesses in returning to their usual growth. Up to $500,000 is available and businesses can pause loan repayments for up to eight weeks. The facility is only available for between 3-12 months but there’s a chance borrowers can refinance to Lumi’s standard small business loans (available up to 36 months) if they meet the credit criteria.
So as it stands, Lumi customers now have more flexibility. If you’re seeking an injection of cash all at once, then a Lumi small business loan could be for you. If you don’t require all of the capital upfront but find that your business is occasionally short on being able to cover expenses or make the most out of growth opportunities, then a Lumi line of credit could be for you.
Lumi Client Reviews
TrustPilot Australia: : 176 Reviews, 94% Excellent, 5% Great, 1% Bad – TrustScore 4.6 / 5.
As the overwhelming majority of feedback is resoundingly positive about the online lender Lumi, we have highlighted just a couple of positive Lumi reviews left by its clients:
I have had the best experience with Lumi so far. The whole process was hassle free and very quick. Would recommend Lumi 100%”.
“Finally a financier that understands small business. A very quick and smooth transaction. Would recommend them without hesitation. Swapped from a previous Lender and very glad that I did”.
As it stands there are two negative reviews of Lumi. One of these is from a business that had been trading for just 5 months and did not get approved – Lumi will not bend on its policy and customers must have been trading for at least 6 months to be eligible for a loan. Another is from a customer who did not receive their loan documentation, and despite several emails, did not hear back from Lumi for a long time.
Analysis of Client Reviews
94% of the Lumi reviews are very positive, with almost all clients rating their experience as excellent. With 176 reviews, the firm has roughly tripled the amount they had at the end of 2019 and the portion of excellent reviews has ever so slightly increased from 93% of reviews to 94% of reviews – very impressive given the turmoil and uncertainty of 2020 onwards. Considering Lumi operates a B2B service, the rate at which the firm is generating new reviews is impressive and demonstrates the fast growth the lender is enjoying. So whilst Lumi currently has less reviews than some of Australia’s largest lenders like Capify (300+) or Shift (400+) it surely won’t be long until they reach these levels. Aside from Prospa, Lumi is generating new reviews at a faster rate than virtually any other online lender.
The positive reviews all have one common theme. Lumi’s service is flexible, efficient and fast. And all of this is backed up by excellent customer service. Some borrowers have even stated in their reviews that they switched lenders to Lumi and haven’t looked back since.
The negative reviews pick up on two different themes. Businesses should only apply if they are sure they meet Lumi’s lending criteria which is clearly displayed on Lumi’s site. More concerning negative feedback relates to Lumi going quiet once a loan was issued – if you need to speak with the team urgently it’s best to give them a call. Hopefully this isn’t a common theme as other reviews report an ongoing positive experience, even after the loan has been issued.
One of Lumi Finance’s reviews marked as ‘great’ states that they believe their interest rate to be a little high. However none of the other reviews mention this and with interest rates calculated on an individual and case-by-base basis, customers should ensure they’re entirely happy with the rate prior to agreeing to the loan. From what we can see there’s nothing to suggest Lumi’s rates are above the norm in this sector and it’s always worth remembering, these online lenders often lend to companies the banks are not prepared to – so borrowers who fall into this category should expect to pay more anyway.
Overall, it’s evident that clients love the service provided by Lumi. Both the efficiency and ease in working with Lumi come through strongly in every review.
Client Reviews Score: ⭐⭐⭐⭐
Lumi’s Online Platform
Lumi’s website, Lumi.com.au, backs up its company values and what it’s trying to achieve with its funding process. Slick, straightforward and simple. Users can easily understand the requirements to apply, what solutions Lumi offer and get started with their loan application in no time.
If you delve a little deeper you can also find more information providing clear advice on the differences between secured and unsecured loans as well as an online loan calculator, so users can get an indication on their repayment schedule. All further vouching for Lumi’s transparency.
Website Score: ⭐⭐⭐⭐⭐
Lumi Loan Compatibility
- Startup: Not immediate but Lumi only requires that you’ve been trading for 6 months, better than the industry average.
- Bad credit: Lumi will take all applications into consideration.
- Sole trader: Yes, Lumi works with sole traders.
- Established business: Yes, Lumi accepts established businesses.
- Turnover: Lumi requires at least $50,000/year turnover.
Lumi’s minimum requirements are some of the fairest in the industry. With a lower time in business and lower annual turnover required than the majority of other online lenders. Previously, the only drawback to Lumi’s compatibility was the fact they only offered straightforward business loans so they may not have been relevant for businesses seeking a variety of lending solutions. However, with the addition of a line of credit, it means Lumi offers the same products as the market leader Prospa. Still some way off the comprehensive lending solutions that Shift provides but Lumi has strongly hinted it will launch a variety of new lending products in 2022 and beyond.
Flexibility Score: ⭐⭐⭐⭐
Lumi Pricing & Rates
There is not a huge amount of detail to be found on Lumi’s website with regards to loan costs but Lumi does specify “Our pricing is fair, straight-forward and transparent.” This is just as we would expect from a new incumbent looking to challenge the most successful online lenders in Australia.
In Lumi’s FAQs we can see that the establishment fee for a Lumi small business loan is 2.5% – meaning it charges less than Prospa, Capify and OnDeck in this area who all charge a 3% origination/establishment fee. Perhaps Lumi recognises it still has a way to go until it builds the same number of clientele as these lenders, so it’s a pretty decent incentive for SMEs to try a newer online lender in Lumi. Particularly businesses who are applying for loans of $200,000+ and that 0.5% has more of an impact.
The interest rate on the Lumi online loan calculator ranges from 9% – 24% and states “our interest rate can start from 14% APR (Annual Percentage Rate, i.e. taking into all costs like the establishment fee). ”. Overall, we think this is pretty fair for a short term loan through an online lender – there are some lenders known to charge 25%+ on an annualised basis.
Looking through Lumi reviews online we were able to find one review which marked Lumi’s service as ‘Great’ and simply stated “Interest a little high”. Other than this review we haven’t found any other reviews suggesting Lumi’s rates were above the industry average. Another review mentions “Lumi refinanced 2 existing loans… saving me almost $5000.00 in repayments over 12 months”. So, depending on your business circumstance, it would seem Lumi could prove a cheaper option than your existing business lender.
Interest Rate Score: ⭐⭐⭐⭐⭐
Lumi Review Summary
- Credibility - 88%88%
- Client Reviews - 87%87%
- Website - 90%90%
- Compatibility - 90%90%
Everything about Lumi is designed for simplicity, with the ultimate aim to save business owners time. There’s no doubt Lumi does that and we conclude Lumi is one of the most straightforward and easy to use lenders in Australia. Both smaller and well established businesses have a high approval rate.
Lumi, although relatively new to the market compared to giants like Capify or Prospa, has received an incredible 99% positive review rate (through an admittedly smaller sample size at this stage). So far, customers are almost unanimously happy with the short turnaround time to get their loan approved and funds in the account.
✓ NSW Based Businesses
✓ Hospitality Services
✓ Professional Services
We hope this Lumi review has helped you to understand the benefits of using Lumi as a lending provider, who the company is and ultimately help you decide whether to take a small business loan from Lumi. For any inaccuracies or more information you’d like to know please contact us.