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 guide the dialog on innovation and Monetary Providers Know-how. 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, however it did give me a fairly 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 convey the innovation and know-how that I noticed in academia and analysis again into the true world, into the world of banking that I had spent my whole profession in, to have an actual world impression, 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 type of discuss larger image right here. We’re going to speak by means of the state of small enterprise lending. The place are there gaps right here? The place can AI match into these gaps? However let’s type of, you realize, begin again one step and simply discuss in regards to the gaps that must be addressed within the small enterprise lending house.
Whitney McDonald 11:19:01
Yeah, let’s discuss in regards to the actuality of working a small enterprise in the US. Your primary downside is entry to capital, often cited in surveys and statistics. And when you discuss to a small enterprise proprietor, what they’ll inform you is that when you’re in search of capital to your small enterprise, you’re not going to Silicon Valley enterprise capitalists. You’re in search of a mortgage, and you’ve got two sub optimum options proper now. You both go to a financial institution they usually provides you with when you go to the proper one, the perfect situations, the bottom rates of interest, the perfect phrases, however it’s going to take endlessly. The typical time to shut an SBA mortgage, that’s one which’s assured by the Small Enterprise Administration. That’s sometimes the perfect funding for a small enterprise proprietor that’s beginning out, attempting to broaden, attempting to accumulate one other enterprise. The typical time to shut a kind of is 90 days. And let’s be actual. Ain’t no person obtained time for that 90 days you are attempting to get that funding for that huge stock buy, for that huge contract that you simply simply received. If it takes 90 days to get the funding, you would possibly 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 provides you with the funding actually, actually shortly, after which you could have a impolite awakening whenever you notice now you’re paying 45% APR I now see Regularly, small companies apply for funding by means of our system which have service provider money advances on their stability 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 sufficient, that’s not moral, that’s not ethical. I don’t even know the way 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 situations. What they lack is the know-how to compete with the web lenders, and that’s the place Casca is available in. Our mission is to assist the trusted banks in America to place extra billions of {dollars} of funding into the fingers 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 speak about a number of the guide effort that also exists within the within the lending course of that does maintain up, you realize, velocity to lending and the way AI can tackle these gaps.Lukas Haffer 11:21:37
Yeah, I imply very virtually. For those who’re a small enterprise proprietor, you’re in search of funding, you go to the financial institution’s web site, and the primary downside is you’re looking for that apply now button the place you can begin your software. Many occasions it doesn’t even exist. Many occasions there’s a bit contact type or a listing of e mail tackle. Of mortgage officers to achieve out to, which instantly causes churn. That’s a chance for any financial institution to make an instantaneous impression, 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 backwards and forwards 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 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 method. You fill it out once more, and that course of continues till the financial institution has gathered all the knowledge they should make an excellent underwriting choice, which generally is a number of years of tax returns, financial institution statements, projections primarily based on the administration’s view on to the corporate. And since it’s all guide, emailing backwards and forwards. Meaning there are two three day flip occasions 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 is just not 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, possibly on Wednesday evening, 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 trade of just a bit bit of data took endlessly. As soon as the financial institution has all the knowledge that they want. Now they should analyze all of that info proper now that’s fully guide. That’s folks pulling up on one display screen a PDF and on one other display screen an Excel sheet, after which they sort 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 acquire for the typical small enterprise mortgage, this would possibly take days, possibly even weeks. It’s 1000s and 1000s of pages which are manually reviewed and pulled over, and that’s just the start of the method. There are a lot of extra steps so as to truly compliantly shut certainly one of these loans, and all of it could possibly truly be tremendously automated utilizing a mix of lovely on-line experiences in an software type, an applicant portal to let folks self guidedly Undergo functions, AI to reply easy questions for folk and comply with up with them on the proper closing dates, after which AI to investigate all the knowledge that got here in and tons of and tons of of integrations with third get together knowledge sources just like the credit score bureaus and the Secretary of State, to assemble all the knowledge 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 means of all the stream, and we assist automate the evaluation on the aspect for the underwriter.Whitney McDonald 11:25:13
It’s actually attention-grabbing whenever you put into perspective the times it takes to get backwards and forwards. You recognize, Monday is a busy day. I’ll get again to you this present day and, you realize, the backwards and forwards, and it’s type of like this never-ending cycle that may, you realize, last as long as 90 days. Is there any technique to quantify financial savings that Casca purchasers are seeing after they do streamline these processes. How a lot you realize time is being saved on that backwards and forwards?Lukas Haffer 11:25:41
Yeah, I can provide 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 sensible, 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 evening, 10:30pm once more. Give it some thought is sensible. 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 start with statistic. That is actually what we’re seeing. And when you discuss to small enterprise house owners, in addition they don’t need to discuss on the telephone with a mortgage officer in regards to the mortgage funding they’re making use of for in entrance of their workers. They don’t need to try this all through the week. In addition they don’t need to miss a day at work. They’re normally 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 dwelling in it. They’re working their small enterprise. They don’t have time to go to the financial institution department both in the course of the week. So we dwell in a actuality the place you’ll want to meet the small enterprise proprietor the place they’re at, and you’ll want to meet them throughout that occasions. Subsequent statistic, what we see with these typical you’ll be able to attain out on-line, fill out a contact type, we’ll ship you an software. Is roughly 90% of individuals churn. And it is sensible once more, proper? You’re attempting to get this achieved, after which all you’re met with is, let’s make an appointment. And also you notice 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 notice that is taking endlessly. You don’t even know whether or not any finish is inside. Nobody is supplying you with a transparent route 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 after we took loans out of that right into a paradigm of the small enterprise proprietor can undergo the web software fully on their very own time, add all of the paperwork, get instantaneous suggestions as they undergo the method, whether or not they test all of the containers, 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 varieties, 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 fully out of e mail communication. There’s no method small enterprise proprietor, busy CEO, working his enterprise, when you ship him a listing, even when you ship him a listing of listed here are the like 5 paperwork I would like from you so as to decide. And right here’s a hyperlink to some folks will anyhow, reply by way of e mail. They received’t log into the portal. They’ll reply by way of e mail. And banks would possibly attempt to re educate their prospects, however that’s not your job. Your job is to deal with each buyer like the one buyer want to fulfill them the place they’re at and the tip result’s they ship you paperwork by way of e mail. You’re taking the paperwork, you place them in the proper place, and also you reply to them over e mail. So how lengthy does it take somebody to formulate the proper e mail if all the info that’s mandatory to write down that e mail exists on sticky notes in your laptop and inside a 25 yr outdated mortgage origination system, and a few of it you’ll want to give you on the spot, a number of the paperwork that have been submitted exist inside your e mail. A few of them may need been uploaded to a Dropbox someplace, and also you spend all your time placing checklists towards 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 shopper that displays all the 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, we’ve got all of that info inside one single pane of glass, as a result of Casca is the system of document in regards to the buyer info. It’s the workflow system for the origination course of, and it’s the CRM system for the communication with the shopper. So I do know precisely what info I’ve on the shopper, what paperwork they’ve submitted. I do know which of them I would like 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 by way of 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 we’ve got and knowledge that we nonetheless want. My job is simply to substantiate ship it out hyper customized message that will increase conversion charges, makes the shopper really feel like they’re the one buyer, as a result of they’re getting that particular white glove remedy. Nevertheless it didn’t take you half of a day to reply to your 1015, leads. These are the three statistics I obtained for you, greater conversion charges, much less guide effort, and many folks apply on weekends.

Whitney McDonald 11:31:23
Yeah, no, when you’ll be able to quantify and put numbers, it actually places into perspective right here, particularly, you realize that final quantity that you simply have been simply sharing, you realize, from 25 minutes all the way down to a couple of minute 63 seconds, I feel what you stated, the numbers communicate, communicate for themselves, in what know-how can do, in in streamlining, one the method for the lender and, you realize, getting these conversions, but additionally getting the funds into the fingers of the small companies, which is, you realize what, what it’s all about. Discuss by means of some examples right here. I do know just lately that Casca simply closed. These 29 million and a few in collection a funding, questioning when you may discuss a bit bit about that capital, what that’s being allotted to, type of inform us a bit bit in regards to the plans for Casca. I do know you talked by means of 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 present prospects. 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 Stay Oak Financial institution and Huntington Financial institution, that are the highest two SBA lenders within the nation, and our present first buyer, bankwell Financial institution, an exquisite neighborhood financial institution out of Connecticut, in addition to quite a few present buyers that double down buyers from Silicon Valley, like Y Combinator, the primary startup accelerator on the planet, and a personal gear lender known 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 prospects and for his or her group members. The way in which we work is to sit down down with them and perceive, what are you doing right this moment? What are the issues that you simply want have 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 prospects are asking for? What are the issues that they think about? What are the issues they’re dealing with that we may help resolve and we began with mortgage origination and making that a lot sooner and far simpler. We just lately began engaged on mortgage servicing to additionally be sure that of us 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 effectively, as a result of banks which are rising mortgage volumes additionally need to improve their deposit holdings?

Whitney McDonald 11:34:38
Nicely, you simply talked by means of 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 realize, totally different processes that may be automated down the road.

Lukas Haffer 11:34:58
I feel that two vital issues to understand on the similar time when fascinated about AI and banking. One, you stated AI is creating quickly. That’s true. Meaning which you can’t simply depend on what labored right this moment. There’s a revolution taking place, and it’s a must to react shortly to it, and it’s a must to shift with it. And that implies that use instances that weren’t doable two three years in the past at the moment are 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 have been extremely structured paperwork. The numbers are at all times in the identical locations, at the very least for a given yr in enterprise sort. Nevertheless 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 may have any any format that’s not the case, that’s now doable. These are the issues that AI and enormous language fashions particularly have enabled. And so you’ll be able to truly learn by means of tons of and tons of of pages of lease roll paperwork that have been hand written and extract the person lease funds to evaluate whether or not a property is definitely absolutely rented out and getting the money stream that you simply’re projecting from it, these issues weren’t doable earlier than they’re changing into doable as we communicate. That’s level primary. The second level is, AI is just not good, and which means, in a extremely regulated sector, you’ll want to construct for one thing being probabilistic, not deterministic. So there’s a probability that the quantity it extracts from the doc is fallacious, which implies you’ll be able to’t simply let the factor extract the quantity and make an underwriting choice primarily based upon it. What you’ll want to suppose by means of is how one can construct it human within the loop, how one can construct it absolutely auditable and absolutely explainable. So what this implies is. As an alternative of simply saying I obtained the debt service protection ratio of 1.25 for this enterprise, so it meets our criterion, as an alternative you say I anticipated at the very least 27 totally different values from this doc, and I’m exhibiting them to you. Left aspect, all of the values. Proper aspect, right here’s the doc and precisely the place I obtained all of them from. And if something is fallacious, you’ll be able to simply click on a button and alter it, and you’ll click on on a unique quantity and pull that quantity in as an alternative, 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 achieved 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 absolutely auditable, as a result of you’ll be able to 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 thrill a fin AI information podcast, please comply with us on x and LinkedIn, and as a reminder, you’ll be able to charge this podcast in your platform of selection. Please you should definitely go to us at finaI information.com for extra finaI Information. Thanks for listening. You.

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