Capital Float Pursues Alt-Lending Collaboration

Two Indian alternative lenders are partnering up to target the nation’s small- and medium-sized businesses (SMBs).

Reports in The Economic Times on Thursday (Oct. 5) said Tata Capital and Capital Float are teaming up, a deal in which Tata Capital will provide working capital loans to SMBs borrowing through Capital Float’s platform.

The companies have also developed a new solution, the “Pay Later” offering, that enables companies to borrow, based on a credit limit, for up to a year. SMBs can make multiple drawdowns, while the credit line gets replenished based on borrower repayments, the news reports explained.

“SMEs are integral to the fabric of our economy, contributing around 38 percent of our country’s national GDP,” said Tata Capital Chief Operating Officer, Commercial Finance, Sarosh Amaria in a statement. “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 toward strengthening our market position,” the executive added.

Tata Capital enables companies to borrow funds to pay their supply chain or build up inventory.

“Tata Capital is a great fit for us, both in terms of vision and focus on delivering great financial experiences to borrowers,” added Capital Float Co-Founder Sashank Rishyasringa in another statement. “Tata Capital’s extensive expertise in Supply Chain Finance along with our proficiency in developing products customized 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,” Rishyasringa continued. “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.”

Earlier this year, Capital Float raised $45 million in Series C funding.