Podcast: Casca CEO Lukas Haffer on alternatives for AI in small enterprise lending

Whitney McDonald 11:17:02
Whats up and welcome to The Buzz a FinAi Information podcast. My identify is Whitney McDonald and I’m the editor of fin AI information. Fin AI information has rebranded from financial institution automation information, marking the following step in our mission to steer the dialog on innovation and Monetary Companies Expertise. Becoming a member of me right this moment, November 11, 2025 is Lucas Hafer, CEO of AI native mortgage origination supplier, Casca. Lucas, is right here to debate the position of AI in streamlining the lending course of, particularly for small companies. Thanks for becoming a member of us,Lukas Haffer 11:17:31
Lucas, in fact. Thanks for having me. Whitney, I’m Lucas. I’m the CEO and one of many two co founders of Casca. I’ve a background in banking software program. I mainly spent my whole profession constructing, sustaining, deploying core banking programs, not a profession I can suggest to anybody. Core banking programs are a ache, nevertheless it did give me a reasonably strong understanding of how the underlying it, infrastructure of a financial institution actually works all the way in which from the cellular and on-line banking on the entrance to the connection to the exchanges, the fee rails, the regulatory reporting on the again. After which I spent two years at Stanford actually diving deep into laptop science and machine studying. And on the finish of it, began Casca with a mission to carry the innovation and know-how that I noticed in academia and analysis again into the actual world, into the world of banking that I had spent my whole profession in, to have an actual world affect, to automate tedious, repetitive work and result in magical, higher buyer experiences.
Whitney McDonald 11:18:35
Nicely, we will certainly get into all of that, the AI behind Casca, and the way that every one works. However earlier than we do, let’s form of speak larger image right here. We’re going to speak by the state of small enterprise lending. The place are there gaps right here? The place can AI match into these gaps? However let’s form of, you understand, begin again one step and simply speak concerning the gaps that should be addressed within the small enterprise lending house.
Whitney McDonald 11:19:01
Yeah, let’s speak concerning the actuality of working a small enterprise in america. Your primary drawback is entry to capital, often cited in surveys and statistics. And if you happen to speak to a small enterprise proprietor, what they’ll let you know is that if you happen to’re in search of capital on your small enterprise, you’re not going to Silicon Valley enterprise capitalists. You might be in search of a mortgage, and you’ve got two sub optimum alternate options proper now. You both go to a financial institution and so they will provide you with if you happen to go to the suitable one, the most effective circumstances, the bottom rates of interest, the most effective phrases, nevertheless it’s going to take ceaselessly. The typical time to shut an SBA mortgage, that’s one which’s assured by the Small Enterprise Administration. That’s sometimes the most effective funding for a small enterprise proprietor that’s beginning out, making an attempt to increase, making an attempt to amass one other enterprise. The typical time to shut a type of is 90 days. And let’s be actual. Ain’t no one received time for that 90 days you are attempting to get that funding for that massive stock buy, for that massive contract that you simply simply gained. If it takes 90 days to get the funding, you may lose out on that enterprise alternative. So the second various that many small enterprise house owners now fall prey to is the great variety of predatory on-line lenders which have spawned up that will provide you with the funding actually, actually rapidly, after which you’ve a impolite awakening while you understand now you’re paying 45% APR I now see Regularly, small companies apply for funding by our system which have service provider money advances on their steadiness sheet that clock in at aprs above 100% and I don’t learn about you and about our listeners right here, however to me, that’s not okay, that’s not satisfactory, that’s not moral, that’s not ethical. I don’t even understand how that stuff’s authorized, however we’re in America, so our response is we compete on the open market. The banks have the higher rates of interest. They’ve the higher circumstances. What they lack is the know-how to compete with the net lenders, and that’s the place Casca is available in. Our mission is to assist the trusted banks in America to place further billions of {dollars} of funding into the arms of small enterprise house owners by giving them the know-how that they should do it sooner and with much less guide effort.Whitney McDonald 11:21:27
Let’s discuss a number of the guide effort that also exists within the within the lending course of that does maintain up, you understand, pace to lending and the way AI can deal with these gaps.Lukas Haffer 11:21:37
Yeah, I imply very virtually. When you’re a small enterprise proprietor, you’re in search of funding, you go to the financial institution’s web site, and the primary drawback is you’re looking for that apply now button the place you can begin your software. Many instances it doesn’t even exist. Many instances there’s a little bit contact type or a listing of e mail deal with. Of mortgage officers to achieve out to, which instantly causes churn. That’s a possibility for any financial institution to make a right away affect, even earlier than we take into consideration AI simply have a correct on-line software. Downside is now with this course of, you find yourself in 90 days of forwards and backwards emailing, as a result of the method begins in e mail, it continues an e mail. And what occurs over these 90 days is you attain out, I would really like some funding. Right here’s a little bit little bit of details about my enterprise. You get again a listing of questions you reply to the questions. You get a listing of extra questions you reply to these questions. You get a PDF type. You fill out the PDF type, you get suggestions. The PDF type was stuffed out the fallacious manner. You fill it out once more, and that course of continues till the financial institution has gathered all the data they should make an excellent underwriting choice, which usually is a number of years of tax returns, financial institution statements, projections based mostly on the administration’s view on to the corporate. And since it’s all guide, emailing forwards and backwards. Meaning there are two three day flip instances between every of those cycles. That’s the way you get to 90 days. It’s 90 days of I reply to the banker on Saturday, as a result of all through the week I’m working my enterprise, the banker shouldn’t be engaged on Saturday. So now on Monday I get the suggestions. Nicely, Monday is the busiest day in my enterprise, so I’m going to reply every time I get the time, perhaps on Wednesday night time, after which the banker responds to me Thursday morning. Now I’m busy, and I’ll reply the following time on the weekend. And now the change of just a bit bit of knowledge took ceaselessly. As soon as the financial institution has all the data that they want. Now they should analyze all of that info proper now that’s utterly guide. That’s folks pulling up on one display a PDF and on one other display an Excel sheet, after which they kind issues from a PDF into an excel sheet to calculate the spreading of the financials of the enterprise, see whether or not the enterprise is definitely going to have the ability to repay the mortgage, and with the variety of sheer paperwork that you simply gather for the common small enterprise mortgage, this may take days, perhaps even weeks. It’s 1000s and 1000s of pages which can be manually reviewed and pulled over, and that’s only the start of the method. There are numerous extra steps so as to really compliantly shut considered one of these loans, and all of it may well really be tremendously automated utilizing a mix of gorgeous on-line experiences in an software type, an applicant portal to let folks self guidedly Undergo purposes, AI to reply easy questions for folk and comply with up with them on the proper deadlines, after which AI to investigate all the data that got here in and tons of and tons of of integrations with third occasion information sources just like the credit score bureaus and the Secretary of State, to collect all the data that an underwriter wants so as to make a correct choice on whether or not the enterprise goes to have the ability to repay the mortgage. In order that’s what cascade us. We assist get the small enterprise proprietor, in a self guided method by the whole circulation, and we assist automate the evaluation on the aspect for the underwriter.Whitney McDonald 11:25:13
It’s actually fascinating while you put into perspective the times it takes to get forwards and backwards. You recognize, Monday is a busy day. I’ll get again to you this present day and, you understand, the forwards and backwards, and it’s form of like this endless cycle that may, you understand, last as long as 90 days. Is there any option to quantify financial savings that Casca purchasers are seeing after they do streamline these processes. How a lot you understand time is being saved on that forwards and backwards?Lukas Haffer 11:25:41
Yeah, I may give you three statistics right here. Primary, this like anecdote round somebody responding on the weekend isn’t simply an anecdote. We now have the statistics and 63% of all interactions occur exterior of banking hours. Meaning nights and weekends. And it is smart, if you consider it, proper? It’s a small enterprise proprietor. They’re busy all through the week. Our peak time of interplay each week is Friday night time, 10:30pm once more. Give it some thought is smart. It sounds curious within the second, however then give it some thought. It’s a small enterprise proprietor that simply closed up the store for the week, introduced their youngsters to mattress and is now able to do their admin work of making use of for that funding they want. Proper? That’s to begin with statistic. That is actually what we’re seeing. And if you happen to speak to small enterprise house owners, in addition they don’t need to speak on the telephone with a mortgage officer concerning the mortgage funding they’re making use of for in entrance of their staff. They don’t need to do this all through the week. In addition they don’t need to miss a day at work. They’re often one out of 1520 folks working the factor. They don’t seem to be managers CFOs accountants that simply oversee the enterprise they’re in. It. They’re residing in it. They’re working their small enterprise. They don’t have time to go to the financial institution department both through the week. So we dwell in a actuality the place that you must meet the small enterprise proprietor the place they’re at, and that you must meet them throughout that instances. Subsequent statistic, what we see with these typical you may attain out on-line, fill out a contact type, we’ll ship you an software. Is roughly 90% of individuals churn. And it is smart once more, proper? You’re making an attempt to get this performed, after which all you’re met with is, let’s make an appointment. And also you understand you don’t have time for this. So that you go to the following hyperlink on Google, and it’s some on-line lender that claims, shut in quarter-hour, and also you say, that’s the one factor I can fairly do. Otherwise you undergo the third flip of questions, and also you understand that is taking ceaselessly. You don’t even know whether or not any finish is inside. Nobody is supplying you with a transparent course on how lengthy that is going to take. And so that you flip in that second. That’s why we see extraordinarily excessive churn charges all through these lengthy, sluggish, difficult processes, and what we’ve seen once we took loans out of that right into a paradigm of the small enterprise proprietor can undergo the net software utterly on their very own time, add all of the paperwork, get prompt suggestions as they undergo the method, whether or not they test all of the bins, all the factors that the financial institution has, after which can get suggestions. Inside 24 hours, we see conversion charges skyrocket to above 80% of individuals submitting full software kinds, and that results in banks simply straight up closing extra loans. That’s a that’s the second a part of this right here. On the opposite aspect, let’s have a look at what it takes to do comply with ups with candidates over e mail, since you’re not getting utterly out of e mail communication. There’s no manner small enterprise proprietor, busy CEO, working his enterprise, if you happen to ship him a listing, even if you happen to ship him a listing of listed here are the like 5 paperwork I want from you so as to decide. And right here’s a hyperlink to some folks will in any case, reply through e mail. They gained’t log into the portal. They are going to reply through e mail. And banks may attempt to re educate their clients, however that’s not your job. Your job is to deal with each buyer like the one buyer want to satisfy them the place they’re at and the tip result’s they ship you paperwork through e mail. You’re taking the paperwork, you place them in the suitable place, and also you reply to them over e mail. So how lengthy does it take somebody to formulate the suitable e mail if the entire info that’s essential to write down that e mail exists on sticky notes in your laptop and inside a 25 12 months outdated mortgage origination system, and a few of it that you must provide you with on the spot, a number of the paperwork that had been submitted exist within your e mail. A few of them might need been uploaded to a Dropbox someplace, and also you spend all your time placing checklists in opposition to what do I’ve? What was my final message with them? It takes you between 20 minutes, 20 and 25 minutes, that’s what we’re measuring there, to have a full, full comply with up e mail despatched out to the client that displays the entire questions that they requested you and your responses that displays what are the excellent paperwork that we nonetheless want and what are the questions that I nonetheless have for them? Whereas on our aspect, now we have all of that info inside one single pane of glass, as a result of Casca is the system of report concerning the buyer info. It’s the workflow system for the origination course of, and it’s the CRM system for the communication with the client. So I do know precisely what info I’ve on the client, what paperwork they’ve submitted. I do know which of them I want so as to get them into underwriting and which of them are nonetheless lacking, and I can instantly draft up a comply with up message, ship it out through e mail, SMS, and it takes somebody on common, 63 seconds to approve that message to exit. So that’s simply me placing proper aspect, right here’s the message that the system drafted for me. Left aspect, right here’s info that now we have and knowledge that we nonetheless want. My job is simply to verify ship it out hyper personalised message that will increase conversion charges, makes the client really feel like they’re the one buyer, as a result of they’re getting that particular white glove therapy. However it didn’t take you half of a day to reply to your 1015, leads. These are the three statistics I received for you, increased conversion charges, much less guide effort, and many folks apply on weekends.

Whitney McDonald 11:31:23
Yeah, no, when you may quantify and put numbers, it actually places into perspective right here, particularly, you understand that final quantity that you simply had been simply sharing, you understand, from 25 minutes right down to a couple of minute 63 seconds, I believe what you mentioned, the numbers converse, converse for themselves, in what know-how can do, in in streamlining, one the method for the lender and, you understand, getting these conversions, but in addition getting the funds into the arms of the small companies, which is, you understand what, what it’s all about. Discuss by some examples right here. I do know not too long ago that Casca simply closed. These 29 million and a few in collection a funding, questioning if you happen to may speak a little bit bit about that capital, what that’s being allotted to, form of inform us a little bit bit concerning the plans for Casca. I do know you talked by examples of how the know-how is getting used. You recognize, it’s it’s in motion at these establishments, giving these quantifiable outcomes and returns, however what else is is within the pipeline? Yeah,

Lukas Haffer 11:32:21
it’s an extremely thrilling time for us. We’re very proud and grateful for the help of our buyers, most of that are current clients. We, as a know-how firm, see ourselves because the champion of the American banking sector, for the American banking sector. So our collection, a funding spherical, was led by cover ventures, which represents roughly 70 of the US banks, alongside Reside Oak Financial institution and Huntington Financial institution, that are the highest two SBA lenders within the nation, and our current first buyer, bankwell Financial institution, a beautiful neighborhood financial institution out of Connecticut, in addition to a lot of current buyers that double down buyers from Silicon Valley, like Y Combinator, the primary startup accelerator on this planet, and a non-public tools lender referred to as Alliance Funding group, we’re tremendous enthusiastic about these buyers particularly as a result of it exhibits that we’re partnering with the banks so as to develop nice software program that solves issues for his or her clients and for his or her crew members. The best way we work is to take a seat down with them and perceive, what are you doing right this moment? What are the issues that you simply want had been simpler? How can we reimagine processes collectively? And that’s how we develop our personal roadmap. You requested, what’s coming down the pipe? It’s at all times decided by what are the issues that our clients are asking for? What are the issues that they think about? What are the issues they’re going through that we may also help resolve and we began with mortgage origination and making that a lot sooner and far simpler. We not too long ago began engaged on mortgage servicing to additionally guarantee that people are making their funds on time, and that we test in often with the small companies on how they’re doing financially, to do annual and quarterly evaluations with them. There’s an incredible quantity of potential in automating servicing processes, and we’re beginning to work on what that may appear to be on the deposit aspect of the home as nicely, as a result of banks which can be growing mortgage volumes additionally need to enhance their deposit holdings?

Whitney McDonald 11:34:38
Nicely, you simply talked by some alternatives within the house. Clearly, the truth of the place AI is, the way it’s getting used, however the know-how itself is evolving so quick, extra alternative down the pipeline, such as you talked about in servicing, you understand, completely different processes that may be automated down the road.

Lukas Haffer 11:34:58
I believe that two essential issues to comprehend on the identical time when eager about AI and banking. One, you mentioned AI is creating quickly. That’s true. Meaning you could’t simply depend on what labored right this moment. There’s a revolution occurring, and it’s important to react rapidly to it, and it’s important to shift with it. And that implies that use instances that weren’t doable two three years in the past are actually changing into doable and bettering quickly. A superb instance of that’s monetary spreading and underwriting, which actually simply solely labored for tax return evaluation as a result of tax returns had been extremely structured paperwork. The numbers are at all times in the identical locations, a minimum of for a given 12 months in enterprise kind. However it by no means actually labored for administration ready financials of a enterprise as a result of they’re administration ready, they’re unstructured. They could have any any format that’s now not the case, that’s now doable. These are the issues that AI and enormous language fashions particularly have enabled. And so you may really learn by tons of and tons of of pages of lease roll paperwork that had been hand written and extract the person lease funds to evaluate whether or not a property is definitely totally rented out and getting the money circulation that you simply’re projecting from it, these issues weren’t doable earlier than they’re changing into doable as we converse. That’s level primary. The second level is, AI shouldn’t be excellent, and meaning, in a extremely regulated sector, that you must construct for one thing being probabilistic, not deterministic. So there’s a probability that the quantity it extracts from the doc is fallacious, which suggests you may’t simply let the factor extract the quantity and make an underwriting choice based mostly upon it. What that you must suppose by is how one can construct it human within the loop, how one can construct it totally auditable and totally explainable. So what this implies is. As a substitute of simply saying I received the debt service protection ratio of 1.25 for this enterprise, so it meets our criterion, as a substitute you say I anticipated a minimum of 27 completely different values from this doc, and I’m displaying them to you. Left aspect, all of the values. Proper aspect, right here’s the doc and precisely the place I received all of them from. And if something is fallacious, you may simply click on a button and alter it, and you’ll click on on a special quantity and pull that quantity in as a substitute, which makes it an influence consumer interface, one thing for an underwriter that is aware of precisely what they’re doing to get their job performed sooner. That’s the human within the loop that’s making it explainable. Right here’s why we pull that worth out of that doc and totally auditable, as a result of you may see for every particular person worth the place did it come from, and whether or not a human overrode it, validated it, or whether or not it was simply pulled by the system.

Whitney McDonald 11:37:47
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Speaker 1 11:39:57
You’ve been listening to the excitement a fin AI information podcast, please comply with us on x and LinkedIn, and as a reminder, you may fee this podcast in your platform of alternative. Please make sure you go to us at finaI information.com for extra finaI Information. Thanks for listening. You.

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