In the race to modernize small business lending, Live Oak Ventures—the investment arm of Live Oak Bancshares—has made a strategic bet on Cascading AI, Inc. (Casca), a startup aiming to rewrite how loans get approved and originated.

Casca’s pitch: use responsible AI to fully automate loan applications and origination while keeping compliance and transparency intact. For a sector notorious for paperwork, delays, and regulatory hurdles, that’s no small promise.

Live Oak as Design Partner

Live Oak Bank isn’t just investing—it’s already integrating Casca into its Live Oak Express loan process, serving as both design partner and proving ground. If the rollout goes well, the plan is to scale Casca across the bank’s franchise, accelerating workflows while enhancing the customer experience.

“Businesses trust Live Oak Bank to provide a personalized, modern approach to lending,” said Chairman and CEO James “Chip” Mahan. “Casca simplifies and accelerates our lending processes while equipping us with insights to build lasting relationships. The tangible value Casca has demonstrated gives us confidence to invest in their future.”

That endorsement matters. Live Oak Bank is one of the largest Small Business Administration (SBA) lenders in the US. If Casca can cut friction in SBA loan origination—a process often criticized for being labyrinthine—it could establish itself as a new standard-bearer in fintech lending.

Automating Loans at Record Speed

Casca’s founders say their goal is bigger than efficiency. “We’re driven to be a force for good, using technology to make capital more accessible to small businesses and fueling the American Dream,” said CEO and co-founder Lukas Haffer. “We’ve built a platform that fully automates loans in record time—setting a new industry standard.”

The startup plans to use Live Oak’s investment to scale operations, expand its team, and accelerate go-to-market efforts.

The Broader Context

AI in lending isn’t new—big players like Upstart, Kabbage, and OnDeck have long used machine learning to streamline credit decisions. But the market is shifting: regulators are pushing for responsible, explainable AI in financial services, and lenders are under pressure to expand credit access while maintaining compliance.

That’s where Casca’s positioning could pay off. By branding itself around responsible AI, it may sidestep some of the regulatory skepticism that has dogged other fintechs. Partnering with Live Oak, a bank with deep SBA lending expertise, could also give it credibility that standalone disruptors often struggle to build.

The Takeaway

For Live Oak, the Casca investment is less about chasing the next shiny fintech and more about future-proofing its lending platform. For Casca, it’s a chance to prove its AI engine can handle the real-world messiness of small business credit.

If it works, the move could set a precedent for how banks adopt AI in a tightly regulated space: not by replacing bankers, but by giving them sharper tools—and giving borrowers a faster path to “yes.”