Recently, Lumi became one of only 7 AFIA Members to have a Code-compliant online small business loan product. Today, we’re going to discuss what the Australian Finance Industry Association’s Online Small Business Code of Lending Practice is, as well as how it applies to you as a small business owner.
What is the Online Small Business Code of Lending Practice?
Launched by AFIA in June 2018, the Code of Lending Practice was developed to provide greater transparency in pricing in the financing process, as well as to establish a new level of industry best practice.
Those who sign the code offer 8 key promises to their customers, including:
- We will be honest and ethical
- We will give you clear information about our loan products
- We will consider your financial circumstances when lending to you
- We will deliver high customer service and standards
- We will deal fairly with any complaints
- We will focus on our customers
- We will comply with our legal and industry obligations
- We will support and promote this code
The Code and the supporting compliance regime have been created through wide-ranging collaboration between AFIA’s Online Small Business Lending Group supported by the broader Association as well as the ASBFEO, SME advocate, theBankDoctor.org and industry association, FinTech Australia. Many small businesses were also consulted throughout the process, providing valuable feedback regarding the confusion surrounding online business loan products.
How Does AFIA’s New Code Assist Small Business Owners?
Put simply, small business customers will benefit from increased transparency and disclosure on pricing. Additionally, the Code will be overseen and governed by an experienced independent Compliance Committee.
Along with the 8 key promises listed previously, this new code also supports small business borrowers by:
- Giving them a tool (the SMART Box™) to easily compare different online lenders’ small business loan product pricing.
- Providing a clear, concise loan summary sheet before a loan is accepted so they can see the key features of a product.
- Ensuring Code-compliant lenders evidence compliance with Unfair Contract Terms provisions as well as other relevant laws.
- Providing them with a visible and readily identifiable accreditation symbol or ‘trustmark’ that confirms their Online Small Business Loan is Code-compliant
- Ensuring they have access to an external dispute resolution service as all Code compliant members are also members of the Australian Financial Complaints Authority (AFCA).
Lumi’s Role in AFIA’s Code of Lending Practice
Since our inception, Lumi has always pledged itself as a transparent online business loan lender. With the creation of the AFIA’s new Code of Lending Practice, it allowed us to officially pledge to adhere to transparent standards on pricing and dispute resolution, as well as compliance with unfair contract terms provisions.
SME advocate Neil Slonim stated: “These are the biggest names in the small business lending space, and having them collaborate with industry bodies to do something about the transparency in the market is a great starting point.”
At Lumi, we’re proud to be one of only a handful of online business loans lenders compliant with the code and encourage you to find out more about it through reading AFIA’s latest media release or the Code of Lending Practice document.
Want to find out how Lumi can help you with a totally transparent unsecured business loan? Visit our website or call 1300 00 LUMI today.