Getting funding from a lender can sometimes be a challenge for small businesses and your borrowing capacity will vary from one business lender to another, mostly depending on their appetite for risk.

At Lumi, we disrupt SME lending by looking at the bigger picture instead of the specific requirements in isolation, because we are invested in helping small businesses grow.

To easily understand whether your business is ready to take out a small business loan, we’ve put together this handy checklist below. 

1. How long has your business been operating?

Your time in operation gives the lender confidence that the business has potential longevity, an important factor in assessing your ability to make ongoing repayments. Generally, the longer you are in business for, the more comfortable a lender is in offering you a longer repayment schedule. Many traditional lenders require longer operation times, but at Lumi we understand that we all have to start somewhere. Therefore, we only require your business to be operating for at least 6 months. 

2. How much is your monthly turnover?

Your monthly turnover will give the lender a good indication on how much money your business can comfortably borrow. This amount is often closely linked to your borrowing capacity and can give you an idea as to how much money you can borrow. For instance, at Lumi, for a $5K loan, we require your business to have a minimum monthly turnover of $5K.

3. What is your business niche?

A lender wants to understand what industry you are operating in to estimate how much your monthly turnover could potentially fluctuate. Certain industries or services present a higher risk profile than others, which can impact the business loan terms. At Lumi, we support most industries and while we assess each business on its own merits, we also take into account average industry profit margins that enable us to lend responsibly. 

Believe it or not, that’s all the information you need to apply for a small business loan with Lumi. We then make further assessments based on your bank data and credit history afterwards. 

Head to staging.lumi.com.au to apply for a small business loan online in less than 10 min or check out our online calculator for more information. We will then be in touch to let you know about the next steps. 

Your Lumi team