Fintech selected for COVID-19 lending scheme

by Madison Utley24 Apr 2020

An alternative lender has been selected by the Australian government to participate in the guarantee scheme set to support up to $40bn of lending to small and medium-sized enterprises.

Lumi has launched a Line of Credit product in response, to provide additional support to the changing cash flow needs of its borrowers.

This product will enable SME customers to “customise” their loans, choosing the duration, payment terms and more.

According to Lumi CEO and founder, Yanir Yakutiel, the product was developed to give customers full flexibility.

“During this period of unpredictability and change, we knew we needed to do more to support our customers,” said Yakutiel.

“Using the new product, a customer who wants flexibility with payment terms or tenor, or is looking for a more bespoke amortisation profile to match their cash flows, wouldn’t typically be approved with a more traditional term loan.

“However, the new Line of Credit option changes that, thus keeping them in business during these challenging times. We’re hoping that, in addition to the government guarantee scheme, we will be able to give small businesses more peace of mind during a difficult period through a flexible offering.”

The scheme sees the government guaranteeing 50% of losses on eligible loans which will be available to both new and existing Lumi customers, subject to certain conditions being met.

Yakutiel expressed pride that Lumi has been selected to participate in the scheme as he believes fintech lenders are uniquely positioned to support the flow of credit into the SME sector.

“It is unlikely we will ever see such a need for such a large amount of capital needing to be delivered so quickly nationwide again for many years to come,” he said.

“If there was ever a moment for fintechs to prove the value they bring to the market, this is it.

“We are built for this purpose, and looking forward to helping even more small businesses through the Coronavirus SME Guarantee Scheme, working hand in hand with other alternative lenders to find solutions for the Australian economy.”