Small business lending start-up Banjo Loans has diversified its product range, hoping to capitalise on the post-COVID recovery with a short-term working capital loan for micro businesses.

The new loan, Banjo Supply, offers between A$5000 and $25,000 of unsecured finance for one to three months.

Banjo Loans chief executive Guy Callaghan said the company’s market research showed that café owners, retailers and similar point-of-sale small business operators were looking for this type of product.

Banjo developed the product with InfraRisk, a digital lending business that provides data analytics, AI and machine learning.

Callaghan described the product as “AI funding”. Applications will take five to 10 minutes and approvals will be immediate.

He said the lending process would be completely automated, with algorithms used to analyse daily business data, such as point of sale receipts.

“We think there is an opportunity to support these businesses as they come out of COVID,” Callaghan said.

Banjo was launched in 2015, offering SME loans of between $500,000 and $50 million. The average loan size of $180,000.

Banjo is funded by Bendigo Bank and a couple of fund managers. Last year it worked with its lenders to develop a hardship product for clients.

At one point it had 36 per cent of its borrowers on deferral or a restructured loan. That number of back to zero now.