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Karen Joy Bakud
financial editor
Banjo Loans is urging small and medium-sized businesses to use artificial intelligence with stronger oversight, saying there are early signs of risk when companies rely on it without proper checks.
The warning comes as more companies are using AI tools for tasks such as loan documentation and recruiting. While this technology is helping small businesses transition quickly, it can also raise issues around accountability and accuracy.
Craig Rowe, chief technology officer at Banjo Loans, said small businesses are increasingly using AI to help prepare loan applications and financial information. He said the speed improvements are most valuable when business owners use the software as a drafting tool rather than a replacement for reviews.
“AI is transforming the way small and medium-sized businesses operate, especially when it comes to loan applications and financial document preparation,” Lowe said.
He said companies can get the best results if their staff verifies what the system produces before submitting documents.
“Companies that make the most of this treat this as a partner rather than a ‘touch-free’ solution. AI can generate a first draft in seconds, and quick human checks ensure the information is accurate. That’s where the real advantage comes in,” he said.
financing risk
This problem is particularly acute in lending, as information can pass through multiple hands before reaching a credit provider. The typical process moves details from business owners to brokers to lenders, increasing the need to keep records complete and accurate.
False or misleading information on a loan application can have serious consequences, whether the mistake is intentional or not. Penalties can include hefty fines, loan cancellation, and, in more serious cases, jail time.
Lowe said the fundamental obligations of borrowers have not changed because software is involved. “We know that AI can dramatically speed up administrative tasks, which is a huge benefit for time-strapped small businesses,” he said.
“However, it is important that companies do not shift the blame entirely onto the tools; the fundamentals of transparency and accuracy in lending have not changed.”
Practical
Banjo outlined three major areas that he believes small and medium-sized businesses should focus on when using AI. The first is accuracy. Users must ensure that the information generated or assembled by tools is correct before it is used in applications, internal records, or routine business tasks.
The second is to increase efficiency without sacrificing detail. Faster completion times will only benefit if all parts of your application remain complete and accurate. This is because omissions and mistakes can delay approval later.
The third is safety measures regarding information handling. Companies using AI systems must ensure that personal and commercial data is protected at all times, rather than assuming that the tools themselves provide sufficient control.
This message reflects broader tensions for small and medium-sized businesses, where AI is becoming part of daily operations. Many small and medium-sized businesses have smaller staff and more time constraints than larger organizations, making automation attractive for management, recruitment, and documentation. However, they often have poor internal capacity to oversee how their systems are used.
Banjo sees the issue as one of governance rather than a rejection of technology. When deployed in a controlled manner and backed by clear internal processes, AI can help businesses address rising operational costs.
Banjo is a non-bank lender specializing in Australian small and medium-sized businesses. Since its establishment in 2015, the company has provided approximately A$1 billion in financing. The company says its typical customer has been in business for seven to eight years and has annual revenue between A$5 million and A$15 million.
Mr Lowe said the onus was on each business and its staff to put in place safe practices. “AI has a huge opportunity to help businesses succeed and address rising business costs,” he said.
“Ultimately, it is up to businesses to decide how to implement the right tools into their processes and systems, and to ensure that their entire team approaches implementing AI tools in a way that is considered safe for the company.”
