LoanTap has just pulled off a major funding win — Rs 74 crore in a pre-Series C round aimed at turbocharging its supply chain financing for small retailers. Out of this, Rs 54 crore came from equity with July Ventures taking the lead. Other familiar faces in the investor lineup include 3one4 Capital, Avaana Capital, Kae Capital, and Swapurna Family Office, which has stuck with LoanTap since day one. There’s also Rs 20 crore in venture debt backing this effort, showing investors’ faith in LoanTap’s ambitious plans.
What’s remarkable is how LoanTap has carved a niche in supply chain financing, particularly for distributor-led ecosystems that serve small but essential retailers like those in groceries and pharmacies. The MSME credit gap in India is massive—around Rs 33.2 lakh crore—and LoanTap is using its secret weapon, the BICRI engine (Business Indicator for Credit Ratings in India), to provide clear, data-driven credit assessments. This tool makes it easier for retailers to prove their creditworthiness and for distributors to confidently extend credit.
In just two years, LoanTap has onboarded over 50,000 retailers and funded more than 4.5 lakh invoices with disbursements exceeding Rs 1000 crore. Now, with fresh capital, the startup eyes a bigger goal: doubling its retailer network to 2 lakh and financing a million invoices, fueling MSME growth across the country. With India’s digital infrastructure booming thanks to UPI, Udyam portal, and B2B e-commerce, LoanTap’s timing couldn’t be better. Their tech-first approach could very well reshape how small businesses access capital in India’s evolving economy.
1. Introduction to LoanTap and Supply Chain Financing
LoanTap sits at the crossroads of fintech innovation and supply chain finance, tackling one of India’s most stubborn problems: the glaring credit gap in MSMEs. We’re talking about a staggering Rs 33.2 lakh crore gap here, with millions of small businesses struggling to get timely loans. LoanTap’s model zeroes in on distributor-led supply chains—a segment that traditional banks have long ignored—focusing on small retailers who are the unsung heroes of the retail ecosystem, especially in sectors like groceries and pharmacies.
Supply chain financing here means injecting working capital or financing invoices so these retailers don’t get stuck waiting for payments. By combining technology with their proprietary credit tools, LoanTap channels money from distributors and lenders directly to the retailers who desperately need it to keep their shelves stocked and their businesses running.
1.1 What Is Supply Chain Financing?
Supply chain financing isn’t new but remains underutilized in India. It’s a credit system that smooths out cash flow by letting retailers and distributors get paid quickly for invoices, sidestepping long waits that can choke liquidity. LoanTap’s entrance into this domain is crucial. Many MSME transactions are informal, creditworthiness is murky, and banks shy away. LoanTap’s transparent approach offers a much-needed lifeline.
2. LoanTap’s Business and Revenue Model
LoanTap runs on two main engines: BICRI, its proprietary credit rating platform, and a supply chain financing system targeting retailer-distributor networks.
2.1 Proprietary Credit Assessment Engine – BICRI
BICRI is not just another credit scoring tool. It’s a carefully crafted engine that evaluates small retailers’ creditworthiness using data points that traditional lenders overlook. This transparency helps retailers understand their financial standing and empowers distributors to extend credit with confidence. What’s more, BICRI integrates smoothly with B2B e-commerce platforms, creating a unified credit ecosystem that’s far more inclusive.
2.2 Invoice Financing and Supply Chain Credit
LoanTap’s invoice financing lets small retailers convert their unpaid invoices into immediate working capital. This is a game changer for cash-strapped businesses needing quick funds to restock or cover expenses. Distributors also get involved, using BICRI’s insights to set credit limits and streamline supply chain transactions.
2.3 Revenue Model
LoanTap’s money comes from interest on loans and fees charged for managing credit services. Its embedded credit strategy within retail platforms ensures a recurring revenue stream that scales as the business grows. This model is both efficient and tailored for a fragmented market.
3. Funding and Investors
The recent Rs 74 crore pre-Series C round shows serious investor confidence. Rs 54 crore in equity led by July Ventures, alongside 3one4 Capital, Avaana Capital, Kae Capital, and Swapurna Family Office, signals a strong backing. Adding Rs 20 crore in venture debt reflects a well-balanced capital structure designed for rapid growth.
3.1 Strategic Importance of the Funding Round
This infusion will supercharge LoanTap’s ability to broaden its supply chain financing services. Expanding retailer onboarding and scaling operations nationally becomes possible with this capital. The mix of equity and debt also suggests a savvy approach to managing growth without diluting control.
4. Founders and Leadership
Satyam Kumar, Co-founder and CEO, is at the helm, steering LoanTap’s mission to revolutionize MSME credit access. He sees invoice financing as the key to unlocking growth for millions of small retailers. BICRI is his brainchild and the backbone of LoanTap’s success, enabling smarter lending decisions and bridging the gap between formal finance and informal retail ecosystems. Under his guidance, LoanTap has grown rapidly, adding over 50,000 retailers and disbursing more than Rs 1000 crore within just two years.
5. The Problem LoanTap Solves
India’s MSMEs contribute heavily to the economy and jobs but suffer from chronic credit shortages. They often lack collateral or formal credit histories, making banks wary. Small retailers, crucial in last-mile distribution, face the brunt of this problem.
LoanTap solves this by:
- Using data-driven credit assessments through BICRI.
- Providing invoice and trade credit financing tailored for small retailers.
- Enabling distributors to extend credit based on transparent risk scores.
- Bridging the informal-formal divide in credit access.
By doing so, it helps formalize MSMEs and provides a lifeline that supports their survival and growth.
6. Industry Growth Trends and Market Opportunity
India’s digital push with platforms like UPI, Udyam portal, and Account Aggregators is transforming MSME formalization. Over 25 million MSMEs are going digital, creating fertile ground for embedded financing.
Key drivers for supply chain financing growth include:
- Rapid MSME digitization.
- Government formalization efforts.
- Booming B2B e-commerce.
- Increasing demand for working capital among small retailers.
LoanTap’s targeted approach positions it perfectly to ride this wave of transformation.
7. Competitor Landscape
LoanTap operates amidst a crowded fintech space with competitors like KredX, Indifi, and Aye Finance. What sets LoanTap apart is its BICRI engine and its deep integration with distributor ecosystems, making it more than a lending platform—it’s a credit infrastructure builder.
Indirect competition comes from banks and NBFCs focusing on larger MSMEs, often ignoring the smaller retailers LoanTap serves. This focus on the overlooked segment is LoanTap’s competitive edge.
8. Journey and Background Story of LoanTap
LoanTap was born from a realization that small retailers were the missing link in India’s credit story. Many lack formal credit footprints, so the team created BICRI, harnessing alternative data to assess risk reliably. Over the last two years, LoanTap has aggressively expanded its reach, embedding financing into retail supply chains and syncing tech with offline realities—a rare but vital feat in India’s complex retail landscape.
9. Future Outlook and Expansion Plans
The recent Rs 74 crore funding is just the beginning. LoanTap plans to grow its retailer network beyond 2 lakh and finance over a million invoices in the next year, focusing on loans between Rs 8,000 and Rs 15,000. Enhancements to BICRI and stronger partnerships with distributors and e-commerce platforms will broaden supply chain financing’s reach, helping MSMEs scale sustainably.
10. Learning for Startups and Entrepreneurs
LoanTap’s journey offers several lessons:
- Focus on underserved markets; they hold vast untapped potential.
- Use technology to solve real problems—BICRI is proof.
- Build ecosystems, not just products. Partnering with distributors and platforms is key.
- Balance funding wisely; blending equity and debt supports sustainable growth.
- Innovate credit solutions tailored to micro-business realities.
Entrepreneurs should emulate LoanTap’s blend of tech, market insight, and partnership-driven scaling.
The Startups News
TheStartupsNews.com thrives on stories like LoanTap’s—where innovation meets India’s biggest challenges. Covering fintech, MSME empowerment, and embedded finance trends, it offers readers a front-row seat to the future of business. LoanTap’s story of bridging credit gaps through supply chain financing underscores the power of startups to drive financial inclusion and economic growth, not just in India but globally.
