Banjo Loans urges SMEs to use AI with human checks

Banjo Loans has urged small and medium-sized businesses to use artificial intelligence with stronger oversight, citing early signs of risk when companies rely on the technology without proper checks.

The warning comes as more businesses use AI tools for tasks such as loan documentation and recruitment. While the technology is helping smaller firms move faster, it can also raise issues around accountability and accuracy.

Craig Rowe, Chief Technology Officer at Banjo Loans, said AI is increasingly being used by smaller businesses to prepare loan applications and financial information. He said the gains in speed are most valuable when business owners use the software as a drafting tool, not a substitute for review.

"AI is transforming how small businesses operate, particularly when it comes to preparing loan applications and financial documentation," Rowe said.

He said businesses get the best results when staff verify what the systems produce before submitting documents.

"The businesses that get the most out of it treat it as a partner rather than a 'touch-free' solution. AI can generate the first draft in seconds, and a quick human check ensures the information is accurate - that's where the real advantage comes from," he said.

Lending risks

The issue is particularly acute in lending because information can pass through several hands before reaching a credit provider. In a typical process, details may move from the business owner to a broker and then to a lender, increasing the need for records to remain complete and accurate throughout.

False or misleading information on a loan application can carry serious consequences, whether or not the errors were intentional. Penalties can include significant fines, cancellation of a loan and, in more serious cases, imprisonment.

Rowe said borrowers' underlying obligations have not changed because software is now involved. "We know AI can dramatically speed up admin tasks, and that's a huge win for time-poor SMEs," he said.

"But it's critical that businesses do not offload responsibility to the tool entirely. The fundamentals of transparency and accuracy in lending haven't changed."

Practical use

Banjo outlined three broad areas it believes smaller businesses should focus on when using AI. The first is accuracy: users should check that information generated or assembled by a tool is correct before using it in applications, internal records or routine business tasks.

The second is efficiency without sacrificing detail. Faster completion times only help if every part of an application remains complete and accurate, since omissions or mistakes can delay approvals later.

The third is safeguards around information handling. Businesses using AI systems should ensure personal and commercial data is protected at all times, rather than assuming the tool itself provides sufficient control.

The message reflects a broader tension for smaller companies as AI becomes part of everyday operations. Many SMEs have fewer staff and tighter time constraints than larger organisations, making automation attractive for administration, hiring and document preparation. But they often have less internal capacity to oversee how the systems are used.

Banjo has framed the issue as one of governance rather than rejection of the technology. AI can help businesses cope with rising operating costs if it is introduced in a controlled way and backed by clear internal processes.

Banjo is a non-bank lender focused on small and medium-sized businesses in Australia. Since launching in 2015, it has provided nearly AUD $1 billion in loans. It says its typical customer has been operating for seven to eight years, with annual revenue of between AUD $5 million and AUD $15 million.

Rowe said the responsibility for putting safe practices in place sits with each business and its staff. "There is a huge opportunity for AI to help businesses succeed and help cope with the rising cost of business," he said.

"It is ultimately up to the businesses themselves to work through how they introduce the right tools into their process and systems, and ensure that the entire team are on board with adopting AI tools in a way that is still considered safe for the company."