Introduction Collagen synthesis is vital for restoring musculoskeletal tissues, particularly in tendon and ligamentous structures. Tissue engineering utilizes scaffolds for cell adhesion and differentiation. Although synthetic scaffolds offer initial strength, their long-term stability is surpassed by biological scaffolds. Combining polycaprolactone (PCL) toughness with collagen in scaffold design, this study refines fabrication via electrospinning, aiming to deliver enduring biomimetic matrices for widespread applications in musculoskeletal repair. Methods Electrospinning employed four solutions with varied collagen and PCL concentrations, dissolved in chloroform, methanol, and hexafluoro-2-propanol. Solutions were combined to yield 60 mg/mL concentrations with different collagen/PCL ratios. Electrospinning at 12-14kV voltage produced scaffolds, followed by vacuum-drying. Collagen coating was applied to PCL and 15% collagen/PCL scaffolds using a 0.1% collagen solution. SEM characterized fiber morphology, tensile testing was conducted to determine the mechanical properties of the scaffold, and Fourier-transform infrared (FTIR) spectroscopy analyzed scaffold composition. Atomic force microscopy (AFM) analyzed the stiffness properties of individual fibers, and a finite element model was developed to predict the mechanical properties. Cell culture involved seeding human bone marrow mesenchymal stem cells onto scaffolds, which were assessed through Alamar Blue assay and confocal imaging. Results Various scaffolds (100% PCL, PCL-15% collagen, PCL-25% collagen, PCL-35% collagen) were fabricated to emulate the extracellular matrix, revealing collagen's impact on fiber diameter reduction with increasing concentration. Tensile testing highlighted collagen's initial enhancement of mechanical strength, followed by a decline beyond PCL-15% collagen. FTIR spectroscopy detected potential hydrogen bonding between collagen and PCL. A finite element model predicted scaffold response to external forces which was validated by the tensile test data. Cell viability and proliferation assays demonstrated successful plating on all scaffolds, with optimal proliferation observed in PCL-25% collagen. Confocal imaging confirmed stem cell integration into the three-dimensional material. Collagen coating preserved nanofiber morphology, with no significant changes in diameter. Coating of collagen significantly altered the tensile strength of the scaffolds at the macro scale. AFM highlighted stiffness differences between PCL and collagen-coated PCL mats at the single fiber scale. The coating process did not significantly enhance initial cell attachment but promoted increased proliferation on collagen-coated PCL scaffolds. Conclusion The study reveals collagen-induced mechanical and morphological alterations, influencing fiber alignment, diameter, and chemical composition while emphasizing scaffolds' vital role in providing a controlled niche for stem cell proliferation and differentiation. The optimization of each of these scaffold characteristics and subsequent finite element modeling can lead to highly repeatable and ideal scaffold properties for stem cell integration and proliferation.