Tata is trying to raise up to £1bn by September to keep Jaguar Land Rover afloat without government help.
It is understood that the Indian firm has mandated its financial adviser Citigroup to find banks with a solid credit rating prepared to underwrite some of the £340m loan pledged by the European Investment Bank, reported Guardian.
Tata is also seeking to tap the debt markets to help secure the £500m-£1bn short-term financing package needed. Some of this funding will comprise of a loan facility to be called on if trading is worse than expected.
A Tata Motors spokesman denied that the company was no longer seeking government help for short-term financing.
But Tata rejected the government's conditions for underwriting some of the EIB loan to secure immediate and short-term help. The Indian firm believes it can secure better terms independently.
Talks are continuing about putting together a longer-term financing package involving a consortium of banks, led by state-controlled Lloyds Banking Group. The conditions for the loans are believed to be more conventional than the terms demanded by the government this month for the short-term package and Tata is confident that progress is being made.
Lord Mandelson's business department remains concerned that Jaguar Land Rover could soon run out of cash. A suppliers' bill of about £100m is due this month and many other bills from the last 12 months need to be paid off this summer.
Tata, which controls Jaguar Land Rover through its subsidiary Tata Motors, will cut or freeze investment plans for new models. More redundancies from its 15,000-strong workforce are also likely.