October 05, 2017

Tata Capital and Capital Float join hands to fund small businesses

The collaboration will improve the SMEs’ credit access through Capital Float’s ‘Pay Later’ product

Mumbai: Tata Capital has entered into an agreement with Capital Float to provide Working Capital Loans to financially under-served Small & Medium Enterprises (SMEs) in India.

Tata Capital will be co-lending on Capital Float’s digital lending platform and, through this relationship, both the companies have collaborated to offer a unique ‘Pay Later’ product to SMEs. Developed in-house by Capital Float, this product provides the borrower with a credit limit of up to Rs50 lakh for a one-year period, pre-defined on the basis of the information shared by the borrower. The uniqueness stems from the fact that the borrower can make multiple drawdowns within the approved limit, which is reinstated from time to time upon repayment by the borrower.

Speaking about this tie-up, Sarosh Amaria, COO, commercial finance, Tata Capital said, “SMEs are integral to the fabric of our economy contributing around 38 percent of our country’s National GDP. Tata Capital is deeply invested in providing access to credit to small merchants and entrepreneurs through our Supply Chain Finance Business, in which we are one of the market leaders. Our alliance with Capital Float is another step towards strengthening our market position. Providing customised products such as ‘Pay Later’ will not only help speed up the loan process and Supply Chain Finance business, and provide a superior experience to our customers, but it will also help boost our pan-India presence.”

Sashank Rishyasringa, co-founder, Capital Float, said, “Tata Capital is a great fit for us, both in terms of vision and focus on delivering great digital experiences to borrowers. Tata Capital’s extensive expertise in Supply Chain Finance along with our proficiency in developing products customised for SME segments makes this partnership particularly potent from a scalability perspective. We believe new-age Fintech companies and established financial institutions need not compete, but can collaborate to widen the financing options available for SMEs. By co-lending with Tata Capital, we can leverage their balance sheet, while they can diversify their portfolio by lending to newer sets of SMEs.”

The unique ‘Pay Later’ product showcases Capital Float’s technological expertise and competency, designing innovative working capital solutions for SMEs. Coupled with Tata Capital’s superior digital framework, wide reach and rich experience in this segment, especially while offering customised solutions, this partnership will enhance the customer’s digital journey by delivering a seamless online experience for SMEs in India. Additionally, small enterprises like distributors and B2B buyers stand to benefit by being able to make quick, hassle-free payments to their suppliers or partners while procuring inventory, thereby facilitating the unhindered growth of their business.