Many enterprises launch themselves with great hope and confidence. However, on an average, one in every four start-ups fails to make it past its first year due to a paucity of funds. Low profits, high overhead or unforeseen expenses, incorrect product pricing, and overstocking of inventories can lead to negative cash flow for any small or medium enterprise (SME).
When the paucity of funds has been created by dubious business strategies, the owners need to review their style of working and make required changes. Other than that, there are times when the enterprise is doing well in its industry and simply needs some additional funds to add more facilities for customers/employees, buy raw materials, develop new product features or expand the business to a new location.
A lack of adequate working capital for such steps towards growth or innovation does not imply that the business is unprofitable. It merely needs to ask for an SME loan from a formal lenders at this stage.
While there are multiple sources of any SME or MSME loan, the priority of borrowers who are keen to execute a profitable business plan or fund the expansion of their venture is to get a quick business loan for SMEs/MSMEs. They do not want to miss the opportunities at hand and search for lenders who can finance their plans in minimum time.
How to get the fastest business loan ?
In an age when digital technology is facilitating different transactions for both businesses and consumers, several non-banking finance companies have emerged as FinTech (acronym for financial technology) lenders who have condensed the loan-granting process. A FinTech company can be the source of fastest business loan for SMEs/MSMEs.
Applying for a Quick Business Loan and Its Benefits –
As a leading FinTech company offering fastest business loan for SMEs/MSMEs, Capital Float funds the growth of Pvt Ltd, Prop and LLP companies in various industries. We have an array of credit products for SME and MSME units that have robust strategies for continual progress in their domains.
To make a working capital loan accessible for more and more businesses, we at Capital Float have a simple eligibility criterion that only requires the borrowers to show a potential for growth in their industry. This efficacy can be proven with a minimum operational history of one year and a certain yearly revenue benchmark, which differs as per the nature of the business/profession, and can be checked on our website or by calling our team at 1860 419 0999.
The process of applying for our SME loan is fully digitalised, and it takes less than 10 minutes to fill in the necessary details. The relevant documents can also be uploaded online to support the information provided in the application. These generally include soft copies of papers validating business ownership, KYC documents, ITR/GST returns and recent bank statements.
Once it is submitted, we review the application on the same day, and upon approval, the requested amount is disbursed within 48-72 hours. The speedy disbursal of funds enables the borrowers to implement their business upgrade/improvement/expansion plans and advance on their profitable journey. The returns from such steps for business growth also make the repayment process stress-free.
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If you have a business plan that will take your ambitious venture to its next stage of growth, Capital Float has a quick Business loan for SMEs/MSMEs that you can use to finance it. For more information on our loans or to meet us personally, do write to us on firstname.lastname@example.org
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To provide quality education, private schools in India must have cutting-edge infrastructure and well-planned facilities. This is even more important now because the generation currently in schools is growing in an environment of mobile computing devices and e-commerce. Since private institutions are entirely dependent on their own earnings to improve their campus, they may need school loans to finance such expenses.
Let us look at the top reasons that drive schools towards taking loans from banks and NBFCs:
1. To construct a new school building
Loan for construction of school building is commonly sought by institutions that are successfully providing education services but need more classrooms to accommodate the increasing number of students. Adding more sections for each grade is also a good idea when schools are focused on keeping a low student:teacher ratio.
2. To build a playground/sports court
School loans may also be required to add a playground, basketball courts, tennis courts or rooms for indoor sports. Games are an essential part of school education, and if a small unsecured loan from an institutional lender can help to build a beautiful playing field, the investment is worthwhile.
3. To develop a laboratory
Schools need to have well-equipped labs for practical experiments concerning physics, chemistry, biology and to give students hands-on experience with computer studies. Some private schools are also required to have Home Science labs as per the curriculum for their students. A quick loan for school laboratory can be procured at easy terms from a FinTech lending company. Such lenders usually provide up to Rs 50 lakhs on loan for building school laboratory.
4. To buy furniture for classrooms, staffroom
A simple reason to apply for a loan could be the purchase of new or additional furniture for students and staff. The cost of ergonomic desks and chairs may not be within the budget of the school, and financial support from a FinTech company can come in handy.
5. To purchase commercial vehicles
Schools that provide transportation services to their students and staff may need to buy new buses or vans. If adequate finance is not available for such purchases, FinTech lenders can offer simple digital modes to provide unsecured loans with flexible repayment options.
6. To build or improve a library
Well-stocked libraries are essential components of any school’s infrastructure. A school that has been running successfully for some time, but does not have a library, can borrow funds from school loan companies to build a quality library on its campus. Unsecured school loans can also be taken to buy stocks of new books that are too expensive to purchase in the available library budget.
7. To start a new facility on premises – stationery/canteen/uniform shop
Private schools try to offer all the essential facilities for the convenience of students. If there is a stationery unit on the campus, students can purchase prescribed textbooks and other essential items without having to visit markets. A shop for summer and winter uniforms makes it easy to buy the exact uniform as required by the school. While canteens are not “must-haves”, they are good to provide hygienic menu options to the students and staff. School loans may be taken to fund such facilities.
8. For repairs and renovation
A school that already has structures or facilities for education and sports may also need a loan to repair, renovate and improve them. It can digitally apply for such funds on a FinTech company’s website.
9. To purchase new teaching devices, audio-visual equipment
School loans fund the purchase of interactive teaching devices that are becoming increasingly important in the digital age. Educational institutions can borrow to install whiteboards, overhead projectors and other audio-visual teaching aids to make learning more interesting for their students.
10. To add/improve day-boarding facilities
Some private schools offer day-boarding amenities to their students. As a part of this facility, they need to provide healthy meals and areas for rest and recreation. To build and improve such environment, they may need loans that are offered most conveniently from FinTech companies.
As a leading digital NBFC offering loans to educational institutions, Capital Float funds all such requirements of schools in India. To know more about our financing products, feel free to call us on 1860 419 0999.
Oct 24, 2018
An eminent panel of experts from International Financial Corporation, Stanford GSB and CreditEase curated a report and highlighted Capital Float as one of the 100 companies in the world facilitating Financial Inclusion. Our co-founder, Gaurav Hinduja spoke with Anju Patwardhan, MD of CreditEase China on Capital Float’s business model, strategic direction and technological breakthroughs. Read the full interview below.
1. What inspired you to start your business?
The fact that India had more than 50 million SMEs with no access to formal credit who, despite contributing a staggering 15% to the country’s GDP with a high market share of 40% towards employment, had an unmet credit demand of $ 400 billion. Traditional lending institutions are limited by the constraints of their conventional underwriting models that restrict financing due to the volatility of this sector. This, in turn, pushed SMEs to the informal sector where the high interest rates charged by moneylenders fettered borrowers to a chronic cycle of debt. Capital Float was established with the objective to bridge this gap in the market with innovative and flexible credit products for SMEs, delivered in an efficient and customer-friendly manner.
2. Who is your target user base and what is your mission for this group?
Capital Float aims to service high potential, under-served, SMEs with an annual business turnover ranging from Rs 10 lakhs to Rs 100 crore. Our mission is to provide a seamless borrowing experience using customized finance products that cater to the specific needs of different SME segments. Here, technology plays a crucial role in reducing turnaround times, implementing paperless processes and pioneering predictive lending.
Also, we drive our products and processes to realize the national objective of financial inclusion. A recent example of this is the introduction of the Proprietor Loans product that facilitates business growth for micro-entrepreneurs in India. The product targets the small retailer segment such as mom-n-pop stores, salons, medical stores, mobile phone retailers, small restaurants, etc. who face challenges in obtaining loans for business expansion from traditional lenders owing to a lack of formal credit history and sufficient collateral. Capital Float is the first company in India to introduce a product that finances this segment. Moreover, we’ve disbursed the quickest SME loan in India, for this loan, in under 90 seconds.
We designed the Proprietor Loan app in collaboration with IndiaStack. This simple loan app enables small retail store owners to apply for a loan ranging from Rs. 25,000 to Rs. 5 lakhs without having to leave their store. Benefited by the merits of a completely paperless process, the applicant has to merely provide their AADHAAR number to apply for the loan. The app fetches the relevant data using the number and underwrites the customer in real time. We disburse funds to the applicant’s account within minutes of the application. We achieve scale by partnering with ecosystem leaders, such as Metro Cash and Carry, PayTM, Amazon Business, Payworld, etc. and serving storeowners operating on these platforms.
3. What is the central “friction” that your company is striving to overcome/mitigate, and what is distinctive about your strategy for enhancing financial capacity your user base?
Predominantly, traditional banks and non-banks have employed a conventional approach to underwriting. They have constantly shied away from utilizing data points from public sources such as social media, and those that are available from the Government in the form of Aadhaar and GST information. Capital Float has designed its credit underwriting with the fundamental understanding that every SME is different. Leveraging data points from partners in each industry sector along with conventional data, our rigorous credit underwriting engine processes loan applications and disburses funds in real time.
In terms of enhancing the financial capacity of SMEs, we lead a partner-driven approach. The company has partnered with ecosystems across various verticals such as e-commerce (Amazon, Flipkart, PayTM, eBay, Alibaba, Amazon, etc.), retailers (Storeking, Metro Cash & Carry), PoS payment enablers (Mswipe, Pine Labs, Bijlipay, ICICI Merchant Services), digital remittances (Wirecard, Payworld, Eko) etc. By taking an ecosystem led approach, we are able to maintain a low OPEX and cater to a wide range of SMEs without increasing our sales headcount.
We have the widest portfolio of working capital finance products, ranging from Merchant Cash Advance (loans against card swipes) and Supply Chain Finance (loans against bills receivables) to Unsecured Business Loans (traditional business instalments loans) and Proprietor Finance. We designed a unique credit solution called ‘Pay Later’. By using this product, borrowers can make multiple drawdowns from a predefined credit capacity. Interest is charged on the utilized amount and not the entire credit capacity, and the balance gets restored upon repayment. ‘Pay Later’ can be used to make supplier payments within 24 hours.
A collaboration of partnerships with industry leaders and niche products ensure that we can expand our outreach to a majority of our target base and enhance their financial capacity.
4. How does your business model balance the objectives of (a) providing benefits to your user base and (b) meeting the financial targets of your investors?
The SME sector in India is restricted by technical as well as functional limitations that inhibit their access to formal sources of finance. Most small enterprises simply cannot afford to expend time for the lengthy processes and immense documentation requirements that are mandatory to avail a loan from banks or traditional NBFCs. Presenting sufficiently valuable collateral for the loan amount they require is another barrier that most SMEs can’t overcome. Capital Float has a completely digital loan application process that eliminates the need for borrowers to be physically present at a lending institution’s premises to apply for a loan. The use of unconventional data points further reduces the need for a multitude of documentation for credit underwriting. All our SME-oriented credit products are unsecured in nature, which facilitates easy access to finance for a previously ineligible majority of business owners.
Customer satisfaction is immensely significant to us, which drives our efforts to ensure that we offer the best-in-class user experience to our borrowers. This is made possible through continuous innovation that enables us to adapt quickly to the ever-increasing demands of our core target base. Apart from these, we are willing to venture into unexplored SME avenues that face a significant credit deficit. We have recently launched credit products such as Proprietor Loans, Franchise Finance and School Loans for niche customer segments that have previously received little financial backing from lending entities in India. Our constant product & process innovation to reach out to new audience ensures that we never fall short in fulfilling the financial expectations and reinforcing the continual faith of our investors.
5. To what extent, if at all, are traditional deposit-taking financial institutions potential collaborators for fulfilling your mission?
Being an upcoming technology driven lender, we view traditional banks and non-banks as collaborators, not competitors. Capital Float operates India’s largest digital co-lending model, wherein we co-lend with banks, NBFCs and others. We currently have several banks and NBFCs such as RBL, IDFC, IFMR and Tata Capital participating on the platform. Loans are presented on the platform and offered on a first-come- first serve basis. We co-lend up to 30% of each loan to ensure that we have our skin-in- the-game and risks are mitigated. This model works emphatically well, as participating entities are able to leverage the strengths of the other. Banks and large NBFCs possess immense balance sheets, which when made available on the platform lowers our cost of capital. Meanwhile, banks are able to meet their priority sector lending targets by lending to SMEs via the platform. Our data-driven assessment and speed of processes, backed by a robust digital infrastructure significantly lowers the cost of acquisition for participating entities.
The co-lending model currently contributes to 40% of our AUM. We expect this figure to reach 50% of our AUM by end of this financial year.
6. Stepping away (perhaps) from your own company’s mission, what do you see as the major regulatory or technological breakthroughs needed to take a major next step forward in building global financial capacity?
Digital lending companies have evolved as disruptors in traditional financial markets, with an estimated one third of consumers worldwide using FinTech services. To sustain the efforts of this upcoming sector and extend their outreach to the majority of their target group, opening public sources of funding is a necessity that requires government intervention. In India, public funding initiatives such as MUDRA and SIDBI refinances institutions that lend to MSMEs, but within regulations of their own. As a result, refinancing support fails to cover the high operating cost of the small-ticket, short duration unsecured loans that are provided by FinTech lending institutions.
Creating a sustainable digital infrastructure that facilitates easy transfer and recovery of finance offered by FinTech lenders is the need of the hour. This, when implemented via eNACH, will help the digital ecosystem in achieving faster adoption.
Also, enhanced access to government data is yet another factor that will be a game changer for building global financial capacity. With the introduction of a new indirect taxation regime in the form of GST, India has acquired a verified database of tax compliant businesses that offers significant information to determine the credit worthiness of business loan applicants. If this data can be shared with FinTech lenders and credit rating agencies through a secure API, this will result in increasing lending opportunities to myriad SMEs across the country.
Oct 24, 2018
FinTech is disrupting the very fundamentals of money management the world over, and India is no exception. With the Prime Minister’s focus, especially, on making India “digital”, a number of programs and schemes have been launched. In fact, many of the schemes have taken a cue from the private sector and have upped the innovation game to deliver a comfortable and convenient money management experience. From the point of sale (POS) machines to merchant cash advance to e-wallets, we are seeing a plethora of FinTech products and services change the way we pay. And this phenomenon is occurring across industries, whether it is the fast moving e-commerce sector or the heavy-duty manufacturing sector.
Consumers are at the receiving end of these changes and need to fast adapt to the new payment means. First it was a revolution of the plastic money, with cash bring replaced by credit and debit cards. This demanded the use of other paraphernalia, such as the point of sale devices at the checkout counters. Now, with niche FinTech innovators such as Paytm and MobiKwik, even the point of sale devices are not required. It is just scan and pay. The government has taken this ease of payment a step further by bringing to light the Bharat QR payment method.
What is Bharat QR
Bharat QR is a payment process driven by a Quick Response Code or QR code. A user who has the Bharat QR-enabled bank application on his or her mobile phone can make a payment quickly, easily and safely. The best part is that scanning the machine-readable optical grid translates the bank account information without your having to swipe or hand over a card, making it extremely convenient! This is because the QR grid stores the person’s bank information. This is similar to using a Paytm or a FreeCharge or a MobiKwik e-wallet, the advantage being that in Bharat QR, payments are linked directly to your bank account rather than to a separate e-wallet. There is thus no hassle of transferring money to your Paytm wallet or MobiKwik wallet. Alternatively, the user can also access Bharat QR through the Bharat Interface for Money or BHIM universal app, which is a UPI developed by the National Payments Corporation of India (NCPI).
Currently, Bharat QR is available on the mobile applications of 15 nationalised and private banks, namely – Axis Bank, Bank of Baroda, Bank of India, Citi Union Bank, DCB Bank, Karur Vysya Bank, HDFC Bank, ICICI Bank, IDBI Bank, Punjab National Bank, RBL Bank, State Bank of India, Union Bank of India, Vijaya Bank and Yes Bank. It is also linked to VISA, MasterCard, American Express and RuPay cards. Its scale is expected to increase in the coming days.
A look at Point of Sale
Bharat QR is thus a leap ahead of the Point of Sale payment mechanisms, which were the mainstream payment devices used at most commercial and consumer locations such as shops and restaurants. The Point of Sale or POS terminal is a computerised replacement for a cash register that can process credit and debit cards. A customer swipes their card in the machine and enters the PIN number to verify and complete the transaction. The POS is installed at the merchant location, mostly by the bank that they associated with. Not only does the merchant bear the cost of the device and the installation, but they are also compelled to pay the issuer bank a merchant discount rate (MDR). This is a percentage of the transaction value. In a bid to boost cash transactions, the RBI had rationalised the Merchant Discount Rate (MDR) for debit cards. Accordingly, a cap has been introduced for debit card point of sale payments, capped at 0.75% for transaction values up to Rs 2000 and at 1% for transaction values above Rs 2000. However, it continues to be an expense for the merchant, and is often passed on to the customer by increasing the selling price of the product or service. Often, buyers may not even realise that they are being charged extra for the MDR.
Other payment instruments: e-wallets
The first leg of replacing the point of sale was the onslaught of e-wallets such as Paytm and FreeCharge. Although they operate on the same principle as that of scanning a QR code, they are somewhat restrictive because they require both the transferor and the receiver to have the same e-wallet installed on their smartphones. The need was thus felt for a faster and easier money transfer mode, which caused the Bharat QR to come to the fore, thanks to the design and development by NCPI.
Advantages of Bharat QR
The Bharat QR is a step towards financial freedom by means of cashless transactions. It relieves one from the hassle of swiping at the point of sale or of facing detection troubles with one’s plastic money at the point of sale. Because there is no requirement of a physical use of a card, the risk of data theft or security issues through tampered or cyber-compromised point of sale devices is also minimised. Costs are reduced from both the consumer and merchant viewpoints, since the need for expensive point of sale devices and their MDR charges is eliminated. A significant advantage of Bharat QR is its ease of operation; i.e., the buyer and seller need not download the same payment application to make the payment happen, unlike Paytm. This is because the Bharat QR is directly linked to a single bank account. It poses a logistical relief, since businessmen now need not shuffle between different wallets and track their credits and debits – a tedious task. Moreover, the money transfer happens instantly because Bharat QR uses an IMPS service. Bharat QR truly has the potential to create a FinTech revolution.
It is clear that Bharat QR paves a convenient way ahead for paying and receiving funds. It is a great idea to get started on this universal tool. As a merchant, you must register with your banks to get authorised to receive payments through Bharat QR. Link your bank account to the BHIM app and generate your unique Bharat QR Code, take a print of your QR code and stick it onto your payment counter to get started.
Oct 24, 2018