AI to speed up borrowing by small business and startups
The award-winning UTS Advanced Analytics Institute (AAi) is assisting organisations in the fintech sector to use Artificial Intelligence (AI), data science and data analytics to streamline many existing time-consuming and frustrating processes.
AAI’s latest project is with YOZO, which is delivering a simple, fast and transparent loan application process for Australia’s small businesses and startups.
Developed with AAi, the YOZO Limit Calculator provides businesses with an evaluation of their potential unsecured borrowing capacity – essential for managing cash flow in start-up and growth phases and for business owners who don’t own a home.
Each evaluation is accompanied by an indicative simple interest repayment schedule to help understand the cost of a loan.
AAi Professor, Dr Guandong Xu said that the Institute’s strength is knowing AI, and understanding business and customer need to simplify arduous processes.
Applying AI using big data, natural language processing and predictive modelling can expedite YOZO’s credit evaluation processes, and help make businesses more agile and responsive to opportunities.
AAi is building a system that can determine the borrowing capacity of a business loan. Determining how much a business can borrow is currently a very manual process and involves a lot of paperwork: forms, bank statement, credit history, etc.
Unlike home loans, unsecured business loans have much higher risk thus whether an application is a ‘decline’ or ‘accept’ and how much can be borrowed largely depend on the preferences of the lender. The same application could have different results from different lenders.
The AI model learns from historical borrowing cases (both accepted and declined) to predict the borrowing capacity of future applications - instantly and automatically. Expectations are for higher accuracy than a typical broker as the model learns (from historical data) the underlying preferences of each lender, for example, a lender could be biased towards retail business, though this is not explicitly stated anywhere.
The first version of YOZO has the AI framework enabled and is ready to learn! As more and more people start to use it, and more data is available, it will rapidly improve itself over time.
YOZO Co-Founder Matthew Driscoll said business owners would appreciate how AI and data science is streamlining the credit application process, eliminating the need for detailed personal data or credit bureau checks in calculating their indicative borrowing limit.
The changing landscape of lending regulations in Australia is increasingly hard to navigate. Our aim is to help small business cut through this to ensure they can make the most of every opportunity.
Business owners can quickly navigate the intuitive self-service site to apply for finance 24 hours a day. Integrating with BankStatements and CreditorWatch, an application can be assessed, approved and funded into the business’s bank account within 48 hours.
A simple sign-up process provides the business a dashboard of their current estimated limit, facilities and their application status, so they’re always informed.