In recent years, automation in small business lending has solved several challenges, but it hasn’t tackled the root causes of inefficiency and inequality in the sector. Traditional tools have primarily sped up basic tasks like customer onboarding and credit scoring, but they’ve done little to fundamentally alter the lending structure. As a European entrepreneur who has worked with numerous startups and financial partners over two decades, I see the emergence of "Agentic AI" as a turning point. Unlike older systems, these autonomous agents take action, learn, and adapt in ways that closely mimic human decision-making. For small business owners fighting for fair financing, this technology could address long-standing obstacles.
Why Automation Falls Short
Automation mostly handles repetitive jobs like document processing or simple risk analysis. While this has reduced turnaround times, many small businesses still face barriers to credit. Data from the U.S. Small Business Administration highlights that over 75% of business owners struggle to access funds. Automation doesn’t change the deeper issues of rigid underwriting criteria, lack of personalization, or the high cost of servicing small-dollar loans.
Consider the scenario: a local café owner seeks a modest loan of $50,000. For many lenders, the cost of underwriting this loan is close to that of a $3 million loan, making it less attractive. Automation may complete background checks faster, but it doesn’t tackle profitability problems. As a result, small businesses are either declined or offered unfavorable terms.
What Makes Agentic AI Different?
Agentic AI rises above automation because it doesn’t require the same rigid, rule-based approach. Think of automation as a basic assembly line. Agentic AI, on the other hand, acts like an experienced financial advisor who knows how to tailor solutions. It integrates predictive and generative AI capabilities but goes further by completing multi-step tasks on its own.
Here’s a distinction worth noting: while a standard algorithm might calculate credit scores, an agentic system could autonomously analyze cash flows, consider industry challenges, and recommend custom loan terms. Borrowers might receive repayment schedules that adapt to their seasonal revenues, offering flexibility not usually found in traditional lending.
How Does This Apply to Small Businesses?
For small businesses, access to capital can determine success or closure in critical moments. Agentic AI empowers lenders to make smarter and faster lending decisions, especially for smaller loans. Some key ways it is changing the game include:
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Improving Access to Credit
By analyzing transaction data, sales cycles, or even unstructured data like online reviews, Agentic AI can create accurate profiles of creditworthiness even for businesses without long credit histories. -
Personalized Loan Offers
Small businesses rarely fit into one-size-fits-all loan products. Adaptive agents design custom offers based on seasonality, regional trends, or unique industry pain points. -
Lower Costs for Lenders
Automating the entire underwriting process means lenders can profitably approve smaller loans, making funding accessible for more businesses. -
24/7 Availability
Agentic systems don’t stop working after hours. Borrowers can apply and receive decisions outside traditional business times, a significant benefit for time-strapped entrepreneurs.
How to Get Started if You’re a Small Business or Lender
To harness the potential of Agentic AI, both lenders and business owners need to make adjustments.
For Small Businesses:
- Centralize Financial Data: Accurate and organized data gives AI systems a complete picture of your business. Tools like QuickBooks or Xero make this easier.
- Focus on Digital Presence: Agentic AI often uses online indicators, such as customer reviews or social media engagement, to assess credibility. Claiming your business profiles and maintaining online activity can enhance your funding chances.
- Engage Early with Lenders: Understand what kind of data is critical and begin establishing those metrics long before you need funding.
For Lenders:
- Invest in Agentic AI Systems: Companies like Kaaj AI and other fintech innovators already offer services tailored to small business lending.
- Implement User-Friendly Platforms: Borrowers shouldn’t need a financial degree to navigate tech. Ensure the tools are intuitive for non-technical clients.
- Regulatory Compliance: Any implementation of agentic systems must maintain full transparency and keep detailed audit trails.
Mistakes to Avoid
Both lenders and borrowers often face bumps when integrating new technologies. Here’s how to steer clear of common pitfalls:
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Overlooking Human Oversight
While agentic AI is powerful, it’s crucial for lenders to oversee decisions, especially since bias in training data can lead to flawed recommendations. -
Failing to Educate Users
Small business owners may lack the expertise to understand how agentic AI works. Lenders must clearly explain the processes and benefits. -
Neglecting Non-Digital Data
Even as AI capabilities grow, businesses shouldn’t rely solely on digital inputs. Lenders should account for offline operational insights when profiling.
Digging Deeper: Economic Potential
Agentic AI has already started demonstrating its worth in various sectors. In finance specifically, it’s estimated to unlock access to trillions in currently unaddressed lending opportunities. Globally, the fintech AI market is projected to reach $83.1 billion by 2030. Some reports suggest that US banks and financial institutions have already spent over $10 billion this year on enhancing predictive models with AI.
Conclusion: Turning Potential into Practice
For those of us building businesses, access to fast, reliable, and fair funding is critical. I’ve worked with countless small businesses across Europe struggling through rigid lending systems. Agentic AI represents a clear path forward. It can close gaps in the market, streamline lending for smaller loans, and ultimately bring more financial empowerment to entrepreneurs.
For entrepreneurs, it’s time to take charge and start leveraging technology to break down financial barriers. For lenders, Agentic AI offers an opportunity to serve a booming small business sector while pushing operational boundaries.
Agentic AI is more than the next iteration of technology. It is a fresh perspective for creating a lending process that puts people first while making the economics work for everyone.
FAQ
1. What is Agentic AI in the context of financial services?
Agentic AI refers to autonomous agents in AI systems capable of making decisions, executing tasks, and adapting continuously, which contrasts with rule-based robotic process automation. Learn more about Agentic AI in banking
2. How can Agentic AI improve small business lending?
Agentic AI enables real-time, personalized loan underwriting by automating tasks like credit scoring, transaction analysis, and repayment customization, making small-dollar loans more viable for lenders. Explore Agentic AI's impact on lending
3. What is the main limitation of traditional automation in small business lending?
Traditional automation focuses on repetitive tasks like document processing without addressing rigid underwriting criteria or the high cost of servicing smaller loans. No link available.
4. How does Agentic AI address bias in lending decisions?
Agentic AI uses diverse data types, including unstructured online information, to create fairer and more accurate profiles of creditworthiness. Learn how Agentic AI combats bias
5. How does Agentic AI lower costs for lenders?
By automating end-to-end underwriting processes, Agentic AI makes it profitable for lenders to issue small business loans quickly and efficiently. Discover cost-reduction methods with Agentic AI
6. How can small businesses utilize Agentic AI to increase funding chances?
Small businesses can enhance their funding opportunities by centralizing financial data, maintaining strong digital presence, and understanding lender metrics critical to AI systems. Read tips for small businesses
7. How can lenders ensure transparency with Agentic AI systems?
Lenders must implement robust governance frameworks, including audit trails and detailed documentation of AI-driven decisions. Learn about governance frameworks for Agentic AI
8. What sectors are most impacted by Agentic AI?
Agentic AI is transforming sectors like financial services, retail banking, collections management, and regulatory compliance. Explore AI transformation in various sectors
9. Does Agentic AI function outside of business hours?
Yes, Agentic AI systems work autonomously 24/7, enabling borrowers to interact, apply, and receive funding decisions at any time. No link available.
10. Is Agentic AI only applicable to small business lending?
No, Agentic AI also plays roles in fraud detection, onboarding optimization, customer support, and personalized banking experiences. Discover broader applications of Agentic AI
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
