In a move set to reshape the landscape of small-dollar commercial lending, Lenders Cooperative and Lumos Data have announced the expansion of their partnership. This collaboration, built around innovative technology solutions, aims to improve the efficiency and profitability of lending for banks and credit unions, particularly in small business and SBA lending.

At the heart of this expanded partnership is the Lumos Prime+ Expected Loss Credit Model, a powerful tool that leverages advanced machine learning and decades of proprietary data to streamline credit decisioning. It allows lenders to make more accurate predictions about expected losses on loans under $500,000. By integrating the Lumos Prime+ model, financial institutions are able to provide fairer credit scoring for small businesses, often underserved by traditional models.

Cary Cooper, CEO of Lenders Cooperative, emphasized that banks and credit unions have been demanding more efficient solutions for their small-dollar lending portfolios. The Lumos Prime+ model, integrated into Lenders Cooperative’s Loan Origination System (LOS), has already been instrumental in automating and enhancing the loan approval process. This new phase in the partnership will further empower lenders with tools like the Lumos Business Report, an AI-powered system that automates the generation of credit memo narratives and offers rich insights into industry trends, financial benchmarks, and forecasts.

Brett Caines, CEO of Lumos Technologies, highlighted the significant opportunity this partnership unlocks for both financial institutions and small businesses. By providing automated, AI-driven business insights, lenders can now make faster, more informed decisions, ensuring that small businesses receive quicker access to capital—a crucial factor in today’s competitive landscape.

Furthermore, the enhanced platform will allow financial institutions to scale their operations more effectively, addressing the unique credit risks that come with small business lending. As noted by Stephen Hayes, CFO of Lumos Technologies, many legacy models that use consumer credit scores for small business lending are not accurate enough. In contrast, the Lumos Prime+ model provides a fairer, more precise approach to evaluating small-dollar loans.

Expert Insights on Small Business Lending Transformation

Industry experts agree that AI and data-driven models like those provided by Lumos are becoming increasingly crucial in modern banking. By automating key aspects of the lending process, these solutions reduce the time spent on manual underwriting, enabling banks to better serve the needs of small businesses. Loughlin Cleary, National Sales Director of Lenders Cooperative, stressed that this partnership is not just about efficiency but also about improving the relationship between lenders and their small business clients. With more accurate risk assessment tools, banks can approve more loans while maintaining sound financial practices.

The partnership between Lenders Cooperative and Lumos Data represents a strategic shift towards more inclusive and effective lending practices in the small business sector. As these technologies continue to evolve, they are expected to unlock new growth opportunities for financial institutions while helping more small businesses access the capital they need to thrive.

  Brett Caines, Cary Cooper, Lenders Cooperative, Lumos Business Report, Lumos Data, Lumos Prime+, small business lending, Stephen Hayes