How Cyphr's AI Is Revolutionizing Small Business Lending for the Digital Age

The Problem with Traditional Lending

Jannae Gammage was working as a technology consultant with the Small Business Administration, helping companies access capital through traditional lenders like banks and credit unions. She couldn't stop thinking about a fundamental problem: the ways lenders and businesses connected were woefully outdated, especially on the technological front.

"I was inside the mess, watching good businesses die, while trying to navigate legacy workflows," she told TechCrunch. "My literal job was to find technology to solve this, and it didn't exist. I couldn't find anything."

The Birth of Cyphr

So she called up an old friend, Alaia Martin, and the two got to work. In 2022, the duo started working on Cyphr, a Kansas City-based company focused on making the lending process easier for lenders and small businesses. Cyphr is a Top 20 finalist in Startup Battlefield, part of TechCrunch Disrupt 2025.

How Cyphr's Technology Works

The product analyzes alternative data sources and financial patterns of small businesses to help lenders make decisions about small business creditworthiness. Cyphr went through a few iterations since its launch, but the recent advancements in artificial intelligence paved the way for what the product is today. It officially launched in the market in April 2024.

"When we started out, the problem we were trying to solve was, 'How can we make underwriting smarter, faster, so that these entrepreneurs get access to capital?'" Gammage, CEO, said. "We wanted a world where money moved freely like it did in other verticals. We came in with a borrower-centric experience, whereas a lot of companies were focused on 'how do we make this work for lenders.'"

They started building an LLM, using training data based on overlooked business owners and their company's financials, to help lenders make decisions about which companies to partner with.

"We were doing it manually," Martin, the company's COO, said about building LLMs before AI's latest upgrade. "Even though we're an AI native company, we started doing this without really any help."

Their current model is on top of an OpenAI model, which they've fine-tuned for themselves.

The AI Advantage in Lending

The latest updates in AI, however, did more than boost their product — it also made lenders more willing to work with them, Gammage said. The financial industry was already shifting because of COVID, knowing they needed to digitize and modernize in some ways. "Now you add in this AI, where they're using it on a daily basis, it feels comfortable," she said.

"If we had [gone to market] in 2022, it definitely would have been a lot harder to get buy-in, just because of the fear around technology and AI and the status quo," Gammage said.

Fundraising Journey

The company has raised a million dollars to date. Gammage said the process was easy and hard at the same time.

"The things I thought would be hard were not hard. The things I thought would be pretty straightforward were not at all," she said. One sore point was how capital flowed: They would watch peers raise millions at once, whereas for them, the money came in tranches as they partook in accelerators and various pitch competitions.

"It's very hard to have catalytic moments when you're receiving your cash injections that way," she said.

Martin, meanwhile, was worried about what it would be like fundraising in San Francisco as two Black women with non-technical backgrounds from the Midwest. "We are not what you think of when you think of a tech founder," she said. But she said they didn't have much of a problem. "We were really well received in Silicon Valley."

"I'm so grateful we were able to raise because I know it's less than 1% of us that can say that," Gammage added.

Future Plans and Ambitions

The company has big plans: It's currently building a platform to help companies find opportunities when the World Cup comes to town next year. Gammage and Martin have also thought about new locations for the company, though nothing is set in stone.

"We are excited about the future of the company," Gammage said, adding that winning Disrupt's Battlefield will hopefully help accomplish these goals. "Even momentum requires money."