Capital Float is an online company that provides business loans to small businesses. Its loans are collateral free and come with low interest rates. Its loan process is also simple and quick.
Its unique triumvirate of customer experience, risk management and merchant partnerships makes it an exciting startup to watch. Let’s see why.
1. Quick Disbursement
One of the biggest capital float benefits is that it offers quick disbursement. This is possible due to the fact that the entire process is online. This means that the customers do not have to visit any branch of the company in order to get a business loan. This saves a lot of time and energy for the customers.
In addition to this, the company has a variety of tools and solutions that help them quickly verify customers. This includes Aadhaar-based eKYC and video-based customer identification. This is a huge improvement over the traditional processes that are often paper-intensive and time consuming.
In the coming years, capital float will continue to grow in India as more and more small businesses need a source of financing. This will be a great benefit for both the companies and their customers.
2. Attractive Interest Rates
Many small business owners struggle to get capital from traditional banks. This is because banks view small businesses as high-risk. However, there is a market for financing these small businesses that is currently underserved.
In order to attract borrowers, capital float offers competitive interest rates. This helps them to grow their business faster and increase their customer base. It also provides the necessary working capital to finance growth and expansion.
Moreover, they also offer floating rate interest rates which provide the opportunity to benefit from monetary policy cycles. This allows them to protect their income against potential interest rate declines while enjoying the upside of a higher coupon. These benefits can be a major driver of their business. Capital Float has also made strategic partnerships with e-commerce players to enable them to serve their customers better.
3. Easy Application Process
Getting business loans from capital float is an entirely online process and you don’t need to visit any branch for the application. All the documentation is also available online and you can complete the entire process from the comfort of your home.
Its technology scores applications using qualitative data, including customer feedback and transaction history from e-commerce partners, along with psychometric assessments. The team claims to use over 2,000 data points to test their risk models.
Capital Float is using its technology to enable embedded finance through partnerships with e-commerce platforms such as Amazon, online learning service Unacademy and travel booking firm MakeMyTrip. It has also partnered with payment firms Razorpay and Walnut, which allow customers to sign up for a ‘buy now, pay later’ offer while shopping on their platforms.
4. No Collateral Required
A key aspect of Capital Float’s business model is that the company offers loans without asking for collateral. Instead, the firm uses a variety of solutions, including Aadhaar-based eKYC and video-based customer identification.
In addition, the firm has a number of partners with whom it works to expand its reach. These include Spicejet, an Indian airline, Unacademy, an online learning service, and Amazon India.
By working with these partners, the firm can reach a wider audience and serve businesses that might otherwise be underserved. Additionally, these partnerships help reduce the time and expense associated with vetting new customers. As a result, the company is able to offer loans at very attractive rates. Moreover, it boasts a collection rate of above ninety-five percent, which is almost unheard of in the lending industry.
5. No Hidden Costs
In finance, float refers to the time it takes for money to move from one account to another. Companies and financial institutions often “play the float” to make profits, such as by speeding up the deposit of funds or slowing down the presentation for payment. This is perfectly legal if the money involved is their own. Warren Buffett, for example, uses float to his advantage with his insurance business, Berkshire Hathaway.
This allows the company to offer better pricing and a wider range of products. As a result, they have seen tremendous growth and are continuing to expand. This has attracted the attention of large investment firms, which have provided funding for the company. These investors include Creation Investments Capital Management LLC and Ribbit Capital.