How alternative financing is empowering small businesses’ growth

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NEW DELHI: The total number of unicorns in India ballooned in 2021. Funding overflowed and some large startups opted for the public route.
Capital, however, remains elusive for several startups in India that are working to address the gaps faced by consumers. This could be in e-commerce, mobility, FMCG, healthcare and sustainability, among others.
Sensing this gap, a new category of lenders have emerged, specializing in alternative financing. Leveraging technology and finance, lenders such as Hesa, Evenflow, Dotpe, Gully Network and Minko are looking at funding through a different lens.
Hesa, for instance, is a startup that provides an integrated marketplace specializing in agritech and fintech to 6.5 lakh villages. It offers services such as cash withdrawals, deposits, loans, disbursements, collections and insurance.
“Alternative financing helps to scale faster without diluting much of the equity at early stages and the fact that few of them are linked to performance, will help small businesses to quickly take the advantage,” said Vamsi Udayagiri, co-founder, Hesa.
Similarly, roll-up firm, Evenflow is a startup that helps grow e-commerce brands. It handholds startups across various functions such as new product development, cataloging, managing inventory, platform merchandising and performance marketing, among others. In addition, it provides credit facilities to small e-commerce companies.
“Alternate financing has been a boon to the Indian micro entrepreneurs and SMEs. From revenue-based financing and working capital/inventory loans to growth capital to expand and scale the business, there are multiple facets,” said Utsav Agarwal, co-founder, EvenFlow Brands. “And this has become a reality only over the latter half of the last decade with new age startups tackling the problem of financing & credit in disruptive ways that was far from the focus of traditional banks & NBFCs.”
Gully Network is another startup that steps in to provide a scalable retail platform to small and medium businesses, including those from Tier 1 and 2 cities. By helping these small businesses increase their target audience base, providing timely auto-stock replenishment, driving higher sales, the startup helps them ease into an omni-channel model.
Similarly, Minko, a retail fintech startup, offers an embedded credit facility to small retail grocery store owners with their supplier invoices that enables them to expand.
“The small business owner, especially those new to credit but with great business track records have had a challenge in accessing short term credit at low interest rates,” said Sanket Shendure, co-founder and CEO of Minko.
“New alternatives like a pre-approved credit line from Minko can be accessed via an app, which allow small business owners to easily access credit for seven to 15 days, at interest rates as low as 0.5% and earn 10% margin. This not only helps them grow their business topline but also their bottom line.”



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