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Can generative A.I. mean faster, cheaper loans for SMEs?

Juno AI thinks it can, as it targets brokers and lenders

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Can Juno AI use generative A.I. for faster, cheaper SME loans?

Juno AI co-founders Archit Tiwari and Max Chmyshuk

In summary:

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Loans are a common part of business for SMEs, but there’s a lot of manual work involved in getting the cash into their bank accounts.

If a business is savvy, it might well go to a broker. The broker has to collect a lot of information, find suitable lenders, and then make sure each prospective lender has all the relevant information they need. 

The broker then has to navigate the back-and-forth between the business and the lender when it gets to the application stage, and then finally making sure everyone is aligned on the terms of repayment and everything else that comes with the loan.

Even when a business goes direct to a lender, there can be a lot of emailing, phone calls, and checking paperwork involved. It’s a tedious and time-consuming process.

So is this a perfect opportunity for the latest A.I. tech to step in and save time and money? Juno AI believes so.

Targeting SME debt finance brokers and lenders with its SaaS product, this London-based startup believes it can save admin time and money, while shortening the time it takes for businesses to get their loans approved.

How it works

Using generative A.I, the software can collect information from a client via a chat interface, which co-founder Max Chmyshuk argues is superior to an application form because applicants can ask questions along the way to make sure they’re giving all the right information.

It can also handle email applications, reading them in context, extracting relevant data, finding what is missing and chasing the right people up until it has everything it needs.

Once all the information is collected, Juno AI creates a document in the right format for the lender, containing everything they need for a human to make a decision on a loan.

“Lenders are getting better qualified applications, better packaged, with more data,” says Chmyshuk.

“They can quickly understand whether [a loan application] fits their criteria or not without spending even half an hour per client talking to them on the phone. So ultimately, it's more qualified leads for lenders and more access to capital for SMEs.”

Assuming brokers pass the cost savings on to their customers, this approach might even mean cheaper loans for SMEs as well, argues  Chmyshuk’s fellow co-founder Archit Tiwari:

“The ultimate beneficiary is the small business owner who is running his business, who is very hands-on, but who needs a bit of help in understanding these complicated financial products. And at the same time, who shouldn't be paying so much money for manual processing.”

And there’s a big market here. In the UK alone, gross lending (excluding overdrafts) to SMEs from banks has been pegged at £65.1 billion in 2022. That’s an increase of 12.8% from two years earlier.

Gross new lending to UK SMEs from banks was £3.7 billion in the first quarter of 2023 alone.

But at the same time, it’s a fragmented market that Juno AI believes can be made more efficient. Tiwari explains:

“There are a lot of small brokers. They are individual operators and they do not have the resources to implement anything technologically challenging. So they are very receptive to a solution like ours, which doesn't require any special training but delivers them real value. 

“And most lenders we are targeting have a debt book of around £200 million. They also operate very lean teams, so they don't have big IT teams unlike the Santanders and HSBCs of this world, so they are also looking for a solution like ours.”

An example of an email generated by Juno AI’s tech

The story so far

Tiwari and Chmyshuk both have previous links to both banking and startups.

After 15 years with companies like Citibank, Chymyshuk co-founded SME-focused lender Fleximize in 2013. After leaving that company, he spent some time in the VC world before becoming an entrepreneur-in-residence at mission-driven venture builder Zinc.

It was here he met Tiwari, who had previously worked for HSBC’s ERP division among other roles, before moving to Africa to help grow agriculture giant Olam International’s business in countries including Chad and Nigeria.

After gaining an MBA, Tiwari worked for Amazon, running operations for a fulfilment centre and then special projects, between founding a couple of short-lived startups. 

At Zinc, the pair decided to team up to make SME debt finance more efficient. They’ve already brought on board two hires, specialists in A.I. and machine learning.

Despite the startup only being a few months old, Tiwari says Juno AI already is generating revenue from its first customers. 

They’ve started by targeting brokers as they say it’s more straightforward to integrate with their workflows, but they’re already talking to lenders about coming onboard too.

“Our first two clients have already put £6 million in loan applications through our A.I,” says Chmyshuk.

And there’s more!

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