Capital Float emerges as quick funding option vendors

Capital Float, a Bangalore-based start-up, is emerging as a reliable and quick funding option for vendors selling on marketplace models. The venture provides short-term loans to small businesses and merchants retailing their products on marketplace models like Flipkart or Snapdeal. The company is now focusing on this prospective market to scale business apart from planning to expand in small towns.

The venture has inked partnerships with major e-commerce players such as Flipkart, Zovi, Amazon and Snapdeal earlier this year to provide short-term, unsecured, working capital loans to vendors selling on these marketplaces. This digital financing start-up offers two types of products to e-commerce companies that can be used to purchase inventory and service new orders. For inventory-based players like Myntra and Zovi, Capital Float underwrites receivables and for inventory purchase, it provides 60, 90 or 120 day working capital loans.

It sets up a one year credit facility that is broken down to four cycles. Each cycle in turn is split into weekly repayment instalments. Typically, borrowers take Rs 15-30 lakh loans for 60-90 days, payable at an interest of 16-19 percent. It has so far disbursed loans worth 2 million dollars (over Rs 12 crores) across 40-50 customers, of which 10-15 percent belonged to Tier II towns.