The NatWest-owned unit said the partnership will speed up its lending.
Esme Loans has struck a deal with Microsoft that will allow the business loans platform to use artificial intelligence (AI) to speed up customer applications.
The NatWest-owned unit said the US tech giant will build cloud based data warehouse and provide AI chatbots to answer common customer questions during the application process.
Esme said the new service, due to launch in April, will allow it to “make faster and better targeted lending decisions and to provide automated service assisted by artificial intelligence”.
The UK lender, founded in 2017, provides unsecured business loans between £10,000 - £150,000, adding its has originated £42m of loans to small firms since its launch. The business has approved £59m of loans over this period, but not all customers draw down their loans after approval. It adds its paperless application form takes less than 10 minutes to complete.
Esme chief executive Richard Kerton said: “Combined with their considerable insight and experience, we’re confident that this new partnership will help us accelerate our growth throughout this year and beyond.”
The UK business said the partnership comes after a successful period of “proof of concept” testing late last year.
Microsoft head of UK banking Wayne Bartlett said: “By automating processes and applying artificial intelligence it means that Esme can understand their customers better than ever before and will mean that more businesses get access to credit quicker, which in turn helps the overall economy.”