Scale Without Selling Out: The Definitive Guide to Revenue-Based Financing in India.
Revenue-based financing (RBF) is a non-dilutive funding option where a lender advances capital and is repaid as a fixed percentage of future revenue until a pre-agreed cap or multiple is reached.
In India, a growing crop of fintechs and NBFCs — GetVantage, Velocity, Recur Club, Efficient Capital Labs, Indifi and a few specialised players — now offer RBF-style products for D2C, e-commerce, SaaS and subscription businesses.
What is Revenue-Based Financing? (short, authoritative)
RBF — also called royalty-based financing — gives you cash now in exchange for a percentage of your future gross revenue until the lender has received a predetermined return (often expressed as a multiple of the advance or a flat financing fee). Payments flex up and down with your sales, so slow months mean lower outflows and boom months mean faster repayment. It’s neither traditional interest-bearing bank debt nor equity, and it’s attractive when founders want to avoid dilution or collateral.
Why Indian businesses use RBF (benefits & tradeoffs)
Benefits
Non-dilutive: founders keep ownership.
Cash-flow linked: repayments scale with revenue, easing pressure in slow months.
Faster approvals: fintech underwriters use transaction / payments data for quick decisions.
Tradeoffs
Cost can be high: fees and implied APRs vary; short tenors with steep flat fees can be expensive compared to low-rate bank debt.
Revenue sharing reduces gross margin: you’ll be diverting a % of sales until repayment completes.
Eligibility: best for businesses with predictable recurring or transactional revenue (SaaS, subscriptions, D2C, marketplaces).
Top Revenue-Based Financing providers in India — what they offer & key terms
Below are the leading / widely cited RBF players in India, with available public terms and typical borrower criteria. Where a provider does not publish rigid standard rates (most tailor deals), I’ve summarised typical ranges reported in company pages and press. Citations follow each entry.
1) GetVantage — Popular for D2C, SaaS & marketplaces
What they fund: Marketing, inventory, runway; products include fixed-term and revenue-linked advances.
Typical size: from tens of thousands USD up to ~$500k (range varies by vertical).
Repayment structure & fees: flat financing fees (GetVantage has publicly stated flat fees typically ~6–12%), and typical repayment duration ~6–9 months for many deals — repayments are made as a share of revenue. No equity.
Eligibility / docs: 6–12 months revenue history, minimum MRR thresholds, online payments data and bank statements.
2) Velocity (India) — Focus on D2C & e-commerce brands
What they fund: Growth capital, inventory, marketing & working capital.
Typical size: up to several crores (public site cites ₹3–5 Cr product ceilings depending on product).
Repayment & fees: takes a revenue-share (media and product pages reference typical revenue share bands ~5–10%); tenor is flexible — commonly 6 months to 24 months depending on deal structure. Velocity positions itself as non-interest, fee-based, revenue-linked.
3) Recur Club — Tailored for subscription & ARR businesses (SaaS)
What they fund: Companies with recurring revenue (SaaS / subscription).
Typical size & product: advances tied to ARR — Recur Club advertises advances up to large fractions of ARR (they mention up to ~50% of ARR in platform materials). Repayment over 6–24 months with fixed percentage repayments. Operates as an exchange between businesses and capital providers.
4) Efficient Capital Labs (ECL) — Cross-border SaaS & ARR specialist
What they fund: B2B SaaS and companies with revenues across geographies (can underwrite multi-market revenue).
Typical size: up to multiple millions USD for qualifying SaaS; ECL publicly states product caps (examples: up to $3.5M facility sizes reported for larger customers).
Terms: RBF with tailored multiples and percentage payback based on revenue; fast turnarounds claimed. ECL raised institutional capital in 2024 to scale cross-border RBF.
5) Indifi — NBFC / fintech serving SMEs (RBF-style products)
What they fund: MSMEs, D2C retailers, marketplaces — Indifi offers multiple products including working capital lines and revenue-linked loans.
Typical size & terms: Indifi markets unsecured business loans and revenue-linked offerings; terms vary by industry and underwriting but their product pages and partner pages describe fast disbursal and revenue-share style repayment options for recurring revenue businesses.
6) Other notable players & niche funds
N+1 / local NBFCs & specialised funds: some private capital providers and NBFCs structure RBF deals for emerging brands (deal sizes often ₹10 lakh–₹15 Cr depending on partner).
International RBF platforms: Efficient Capital Labs, eCapLabs and others serve India-facing SaaS; global players (Capchase, Wayflyer, Clearco) have limited or expanding India footprints — check availability.
Typical RBF terms & clauses you’ll see (what to watch for)
Most RBF deals are bespoke, but expect these elements:
1. Advance amount — based on historical revenue (e.g., % of ARR or trailing 6–12 months revenue). (ECL/Recur Club examples).
2. Revenue share (% of gross revenue) — usually 3%–12% per month depending on sector, risk and tenor. (Velocity and marketplace reports show ~5–10% bands).
3. Repayment cap / multiple / flat fee — provider sets either a repayment multiple (e.g., 1.2x–3.0x the advance) or a flat financing fee (GetVantage 6–12% reported). The cap determines total cost.
4. Tenor / term — often 6–24 months; shorter tenors raise effective cost but close deals faster.
5. Use-of-fund restrictions — common limitation: funds must be used for growth (marketing, inventory, geo expansion), sometimes not for owner draws or M&A. Check your contract.
6. Data sharing & monitoring — lenders will require access to payment gateways, bank accounts, accounting platforms and/or POS data for automated revenue tracking.
7. Covenants & default triggers — late payment, sudden revenue drops, or data access revocation are typical triggers; remedies can include higher revenue share, acceleration, or debt collections. Read defaults carefully.
8. Early repayment & prepayment penalties — some providers allow early repayment but may charge fees or reduce discounts; others may calculate refunds differently. Ask up front.
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How to compare offers — 6 practical steps
1. Calculate the true cost: convert the stated fee/multiple into an internal rate or effective APR for your expected cash flows.
2. Simulate low-revenue months: run a 12-month cash-flow scenario to see how revenue share would affect operations.
3. Check data and privacy terms: confirm exactly which accounts they will access and how data is used.
4. Ask about caps & step-ups: understand whether revenue share % or cap can change on covenant breach.
5. Negotiate use-of-funds & reporting frequency.
6. Confirm no hidden equity/warrants — RBF should be non-dilutive; ensure no equity kicker or warrant is attached unless you accept it.
Red flags & legal checks
Unclear repayment cap or ambiguous definitions of “revenue.” Ensure gross vs net revenue and channel exclusions are defined.
Excessive data access: avoid providers asking for unrelated personal credentials.
Aggressive default remedies that allow immediate seizure of bank balances without due process.
Undisclosed equity or transfer clauses.
Final checklist before you sign:
Get legal review (term sheet + sanction letter) before signing
Request a term sheet and run the numbers for your worst month.
Confirm exact revenue definition and payment mechanics.
Negotiate a reasonable monitoring scope and data privacy protections.
Ask about prepayment and default clauses in writing.
Get legal & tax advice — revenue share payments may have GST/tax implications depending on structure.
If you need any further guidance to arrange Revenue-Based Financing, please WhatsApp: 91-9820088394 or email to intellex@intellexconsulting.com
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