Lumi Review 2021

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RATED:

100.0
🗺️ ProductsBusiness Loans
Line Of Credit
💰Funding Amount$5,000 to $250,000
📊 Loan Terms3 to 18 Months
💰 Min. Trading Period6 or 12 Months
💰 Min. Trading Turnover$50,000 to $120,000 per year
🛍️ Unsecured/Secured Unsecured if under $100,000
💳 Funding SpeedApproval Outcome in 2 hours
Same day loan is approved

lumi logo with words lumi review under it

Australian owned Lumi offers two types of finance, these are business loans and line of credit. Funding can be between $5,000 and $250,000 and can either be secured or unsecured. With approval in as little as two hours, Lumi promises one of the fastest approval time of the online lenders. With such fast approval, you can even receive your funds on the same day making Lumi a great option if you need capital fast.

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Loan ProductsSmall Business LoansBusiness Line of Credit
Loan Terms & Funding Size
💰 Loan Amount$5,000 - $200,000$2,000 - $250,000
⏳ Loan Length3 - 18 months12 months for each drawdown (extendable by 12 months)
📆Payment scheduleWeekly (Pay same each week)Weekly (Principal and interest)
💳 Line of Credit Option?✔️
Loan Costs
💸Fees (exc. interest)2.5% Establishment fee$25 for each drawdown
$30 monthly subscription fee
﹪Interest Rate TypeFactor RateFixed interest calculated daily (Principal + interest).
Only pay interest on drawdown
🔓 Unsecured Loans?✔️ (up to $100,000)✔️(can be secured or unsecured)
👍 Early Repayment✔️ (Possible discount on remaining interest, no penalties)✔️
Loan Qualification
🎓 Qualification BasicsABN or ACN
Driver licence or Passport
ABN
Over 18
Australian Citizen
Permanent resident
🛍️ Min. Trading QualificationMin. 6 MonthsMin. 12 Months
📅 Min. Turnover QualificationMin. $50,000 per year$10,000 per month
🗎 Low Doc Loans
😕 Bad Credit ok?
Approval & Funding Speed
🏍 Fast Online Application✔️(Approval outcome within 2 hours)✔️(Approval outcome within 2 hours)
💨 Funding SpeedSame day loan is approvedSame day loan is approved

Lumi Pros and Cons

Pros

  • Unlimited drawdowns up to limit on credit lines

Cons

  • Not for start-ups
  • Asset collateral required for loans over $100,000
  • No Merchant Cash Advance Products

Products – Types of financing available

Lumi offers two types of loans that are available for business purposes, these are:

  1. Small business loans
  2. Line of Credit

While these are the two products that Lumi offers, occasionally they may be willing to offer you other types of loans including:

  • Short Term business loans
  • Long Term business loans
  • Startup Loans
  • Aboriginal and Indigenous Business Loans
  • Professional Business Loans
  • Hospitality Business Loans

Qualification for these loans will be the same as their small business loan, what will differ is the loan terms and funding they will provide. A long term loan for example will have a longer repayment period, while a start-up or professional business loan may have a larger loan amount.

Lumi Small Business Loans

Loans up to $100,000 are unsecured. This means you do not need to provide collateral to obtain the loan. Loans above $100,000 may require some form of security, Lumi will determine if you need to provide security as part of your loan application. Collateral can be in the form of property, vehicle, inventory and even unpaid invoices.  Anything the business owns that is of enough value to cover the loan size.

Most clients with Lumi will have an unsecured loan. As you provide no collateral, the lender is placing trust in the credit worthiness of your business as the lender cannot recover the loan by going after the business assets. For this reason, your business will need to meet revenue (turnover) and credit requirement and the owner or director of the business will need to provide a personal guarantee.

Lumi Small Business Loan Qualification:

Minimum Time Business Operating

Minimum Time In Business

6 Months

Minimum Turnover

Minimum Turnover

$5,000 Per Month
$50,000 Per Year

Credit History

Credit History

No Minimum Credit Score

Other

Other

Valid ABN or ACN
Business Bank Account
6 Months of Bank Statements

To be eligible for a business loan, you need to have an Australian registered business that is producing a minimal annual turnover of $50,000 per year and has been in operation for at least 6 months. These minimum requirements are similar to what most SME lenders will require, however, some lenders are willing to offer larger loans without security. Other lenders may be more strict with business credit score and credit history, while Lumi doesn’t advise a minimum credit score, they do accept low credit applications.

Lumi is able to consider borrowers with bad credit as they use ‘big data’ to establish multiple funding tranches and fund different grades of credit based on the information they receive about the application. Lumi claims to be the first pre-revenue fintech lender create a warehouse securitisation program in Australia, which allows them to find the necessary data to give them reasons to give loans to SME, that would be overlooked by major banks.

Lumi Small Business Loan Funding and Loan Terms

Loan Amount

Loan Amount

$5,000 – $200,000

Term Length

Term Length

3 – 18 Months

Payment Schedule

Payment Schedule

Weekly

Low Doc Loans

Low Doc Loans

?

Unsecured-Secured

Unsecured/
Secured

Unsecured up to $100,000

Lumi is a good option if you need a small business loan. The lender says most clients will pay their loan off in 6 months, which suggest most loans are not of significant size, making them a good choice for a small business loan. Nevertheless, most loans are up to $200,000 with a term period up to 18 months. If you need a loan of larger size, then Lumi will be willing to consider your request, the lender specialises in helping retail, hospitality and professional services but will help any business that requires aloans. Payment for your loan is on a weekly basis and will the same throughout the loan.

While the maximum loan is $200,000, Fastbusinessloan tested the online application process and the amount you can borrow appears to be consistent with a months worth of revenue. If you require greater sums, then speak with a Lumi consultant and they will work with you to find a loan that suits your needs. This is relatively standard across the industry. The amount Lumi will lend you will depend on the business credit and trading history,  and if you have any collateral.

Lumi Small Business Loan Costs And Fees

Origination Fee

Origination Fee

2.5%

Interest Rate

Interest Rate

Factor rate
(not interest rate)

Other Costs

Other Cost Notes

Re-pay the same amount each week

No Hidden fees

No Hidden fees

Early Payment Permitted

Early Payment Permitted

Discount on outstanding amounts

As most clients will pay their loan within 6 months, Lumi doesn’t use interest rates, instead, they provide the entire repayment schedule upfront. By using a factor rate, payment each period can be fixed, which means you will know exactly how much you need to pay each week and this amount will always be the same. This means you can plan your payments in advance and not need concern yourself with changing payments due to variable interest rates.

In addition to the factor rate, you will also need to pay an establishment fee of 2.5%. This fee covers processing and administration costs, Lumi’s origination fee is consistent with what most other lenders charge, as 2 to 3% is common in the industry. The only other fee to be aware of is an early repayment fee. As your costs are fixed, offer a discount on the factor costs, you would otherwise pay. This is normal practise when the costs are fixed, if you wish to avoid costs of early repayment, then you should consider a lender that uses interest rates.

Lumi is very transparent with their pricing, they are a founding member of the Online Small Business Code of Lending so have an obligation to uphold the standards set by their charter. They also provide SmartBox pricing disclosure documents, these documents allow you to understand all the costs you will incur with the loan and allows you to compare pricing with other lenders that provide SmartBox disclosure documents. As the SmartBox display all costs, this means Lumi don’t have any hidden costs and you can be confident the loan contract you sign is accurate.

Lumi Business Line Of Credit Qualification:

A business line of credit may be a better option than a business loan if you wish to control the amount you borrow.

With this type of finance, Lumi gives you access to a credit facility up to $250,000 which you can draw from any time.

The advantage of a credit line over a loan is that you only pay interest on funds you drawdown.

Using a credit line can save costs compared to a business line which is a lump sum loan with interest charges from the commencement.

A line of credit can therefore be best if you don’t know when and how much funding you will need. A business loan is best when you know exactly how much you will need.

Lumi Business Line Of Credit Qualification:

Minimum Time Business Operating

Minimum Time In Business

12 Months

Minimum Turnover

Minimum Turnover

$10,000 Per Month
$120,000 Per Year

Credit History

Credit History

No Minimum Credit Score

Other

Other

Valid ABN or ACN
Business Bank Account
6 Months of Bank Statements

Qualification for a line of credit differs slightly when compared to a business loan.  Your business will need to have been in business for at least one year and have $10,000 in monthly turnover.

Lumi Business Line Of Credit Funding And Loan Terms

Loan Amount

Loan Amount

$5,000 – $250,000

Term Length

Term Length

12 Months for each drawdown
(can be extended by 12 months)

Payment Schedule

Payment Schedule

Weekly

Low Doc Loans

Low Doc Loans

?

Unsecured-Secured

Unsecured/
Secured

Unsecured up to $100,000

  • Must make initial drawdown in the first 4 weeks

The size and terms of the loan quite different from a business loan however with this comes greater flexibility. Loans can be up to $250,000 however you can make a series of smaller drawdowns as long as the amount you draw from the credit line does not exceed $250,000. This line is revolving, which means that you can reuse the capital you drawdown as you pay off your debt. Each drawdown has a 12 month repayment period and you can extend your line of credit facility for a further one year, at the end of 12 months. Should you use a Lumi, line of credit, you must make at least one drawdown in the first month of the facility.

Like with a business loan, Lumi can instantly approve a loan that is in line with a month worth of turnover for the business. If you require a loan of greater size, then speak with a Lumi consultant and they will work with you to find a loan that suits your needs. The amount they can lend you may depend on the business credit history, trading life and if you have any security you can use.

Lumi Business Line Of Credit Costs And Fees

Origination Fee

Origination Fee

$25 for each drawdown

Interest Rate

Interest Rate

Fixed Interest
(calculated daily)

Other Costs

Other Cost Notes

$30 monthly subscription fee

No Hidden fees

No Hidden fees

Early Payment Permitted

Early Payment Permitted

There are a number of costs to be aware of when using a credit line facility. While the credit line, allows you to drawdown capital when you need it (thus allowing you to save on interest costs for the capital you are not using),  you will need to pay $25 each time you activate a drawdown. You will only pay interest on the capital you draw from the facility and this interest is fixed and calculated from the principal on a daily basis. The other cost to be aware of is the $30 monthly fee to maintain the credit line facility.

Like with a business loan, you will get a SmartBox statement outlining all your costs, this means there will be no hidden costs or charges. Unlike the business loan, you can make additional payments to reduce the interest amount you will pay on the principal or you can close the facility early with no penalty and not have any further interests cost.

Lumi Business Line of Credit Payment

Lumi uses automatic debit which means you do not need to worry about missing payments. Payments are automatically deducted from your bank account on a weekly basis.

Lumi Ease of application

Lumi has a simple online application. The application process is neatly divided into 3 stages:

  1. About your loan
  2. About your business
  3. About you

The application process is a series of webpages, each with one question, that will help Lumi find the right loan for you. Lumi ask you the following questions

  1. What do you need the funds for? (you can choose from 14 reasons)
  2. DO you need ongoing access to funds or a one-off loan?  (this will determine if a business loan or line of credit is best for you)
  3. What is the loan amount you are looking for?
  4. What is the ideal loan duration? (in months, up to 18 months)
  5. How long have you been trading for? (0-6 months, 6-12 Months, 1-4 Years, 4+ Years)

Your business

  1. What is your ABN/ACN
  2. What industry is your business in?
  3. What’s your average monthly turnover?

About you

  1. About you (personal details – full name, email address, phone number, password

On completion of these details, you will be advised on the spot how much capital you qualify for. Basic testing indicates you can qualify for about a months worth of turnover. This amount is relatively standard for the industry.

Lumi Funding speed

Online Application

Online Application

Minutes

Approval

Approval

2 Hours (or same day)

Funding

Funding

Same day as approval

Lumi can approve your loan within 2 hours, if you provide all the correct details as part of your application. Funds can be deposited into your business account on the same day they approve your loan.

What can you use the loan for?

Lumi will lend to most small and medium business but have a focus on retail, hospitality and professional services. They will also provide loans to trade and labour, health and wellness and franchises. You can use the loan for any business reason and you are able to use the loan for personal reasons.

The lender suggests the following reasons as part of the application process, to use the loan:

  • Paying suppliers
  • Paying staff
  • Cash Flow
  • Marketing Spend
  • Paying off existing debt
  • Buy Equipment
  • Buy Inventory
  • New Hires
  • Capital to Expand
  • Renovation
  • Relocation/Expansion
  • Tax
  • Other
  • Buy or Start a Business

Lumi Review – Trustpilot and Customer Service

Lumi has a TrustPilot Score of 4.9 (5 stars) from 110 review which is an excellent grading. Comments regarding their customer service were extremely favourable, with big thumbs up given to the fast approval process. Many reviews suggest the customer service team go above and beyond the client’s expectation which can only be seen as a positive thing.

Our Lumi Review Conclusion

Lumi aims to help small business overcome the challenges of getting loans from a bank by making loans simple, fast and flexible.

The key features borrowers will want to be aware of include:

  1. Exceptionally fast loan approval – Loans can be approved in just 2 hours with funding on the same day.
  2. 2 types of financing for flexibility
    1. Business loans are best when you know how much you need to loan,
    2. Line of credit if you only wish to pay interest for what you draw
  3.   Transparency – no hidden fees as your costs are fixed in place of a variable rate

If you need funds in a hurry and are not sure what type of loan is the best for you then Lumi can be a dependable option. The only thing to keep in mind is that if your finance is greater than $100,000 then you may need security.