Data analytics startup Lumos Technologies launched Lumos Portfolio Score, a tool to help financial institutions analyze risk associated with their small business loan portfolios.

The Wilmington-based fintech’s newest offering is the first back-end model in its product suite, said Co-founder and CEO Brett Caines. The company launched its first product, the Lumos Prime+ Score, in January 2023 followed by the Lumos Business Report and Qualification Grade in November. Both previous offerings help lenders decide where to put their money. The portfolio score helps monitor closed loans for performance.

 “You can actually get ahead of any issues with a small business loan and work to resolve what those issues are, so it's about being proactive, rather than reactive,” Caines said about the portfolio score. “A lot of times, banks only react when the credit weakness becomes obvious. They don't have a way to get ahead of it,”

The fintech aims to make it easier for small business lending banks to say, 'yes,' Caines said. As a bank’s loan portfolio grows, monitoring the individual loans and identifying trends becomes increasingly difficult, he said. Lumos Portfolio Score automates that process by analyzing a file from a bank and a few points of information on the loan from the portfolio manager.

It incorporates macroeconomic factors, such as historic trends in the industry, to point the portfolio manager towards investments that are potentially weaker than others, Caines said. The model creates a lead for a human to then investigate, he added.

Lumos Technologies was founded in 2021 by former Live Oak Bank executives. Caines formerly served as the company's Chief Finance Officer. His fellow co-founders, Stephen Hayes and Youri Nelson formerly served as senior vice president of analytics and vice president of analytics, respectively.  

"The application of technology, coupled with the crucial role of data, is the new standard for proactive loan portfolio management," Nelson said in a company news release announcing the product. Nelson serves as Lumos’s chief technology officer.

Caines said now that Lumos Technologies has both front- and back-end products, the startup wants to round out its offerings for all stages of a small business loan’s life cycle — "from the moment a bank is trying to identify who, where, what to lend to,” he said, “all the way through the day that small business pays off the loan.”