Revenue-Based Financing in India — Top Lenders, Typical Terms, Criteria, Benefits & Risks
Revenue-based financing (RBF) — sometimes called revenue share financing or merchant cash advance when applied to card receipts — has become an attractive, non-dilutive funding route for Indian startups and D2C / SME businesses that have recurring sales but want to avoid equity dilution or traditional collateralized loans.
This article explains how RBF works, who the main providers serving Indian founders are, what terms and eligibility to expect, plus the benefits, downsides and negotiation tips founders should know.
What is revenue-based financing ?
In RBF, a financier advances capital to a business in exchange for a fixed amount that will be repaid as a fixed percentage of the company’s gross revenue until a pre-agreed repayment cap (multiple of principal) is reached. Repayments therefore scale up or down with sales — when revenue is high you pay more; when revenue dips you pay less. This helps in aligning cash-flow with repayment burden. RBF is typically short-to-medium term and equity-free.
Why RBF is gaining traction in India:
India’s growth of D2C brands, ecommerce sellers and SaaS companies has created a pool of firms with predictable sales but little appetite for dilution. Several fintech platforms and NBFCs have launched RBF products targeted to this segment. Market writeups and industry coverage suggest the model fits India’s MSME & D2C landscape and that demand has grown meaningfully over the past few years.
Who are the notable RBF providers that serve Indian startups?
GetVantage — One of the earliest and most visible RBF platforms in India. Offers growth capital to D2C, marketplaces, SaaS and other digital businesses; ticket sizes commonly range from tens of thousands of dollars up to mid-six figures (Indian rupee equivalents shown on their site). GetVantage has expanded product offerings and obtained an NBFC licence for part of its operations.
Choco Up (regional / APAC) — Not an India-only company but an active APAC RBF player that funds ecommerce and startups in multiple Asian markets; useful if you sell across borders or are open to APAC financiers.
Other fintechs & NBFCs — A number of fintech lenders, NBFCs and specialized platforms have begun offering revenue-linked or cash-flow based growth loans (sometimes marketed under “growth capital”, “merchant cash advance”, or “sales-linked loans”). Coverage and offerings change quickly — always verify current product pages and regulatory status.
Note: the Indian RBF ecosystem is still concentrated — GetVantage is often cited as the market leader focused specifically on RBF for digital brands — while other mainstream lenders typically offer more traditional working-capital or term loans.
Typical RBF terms you should expect (ranges observed in the market)
These are market-level illustrations based on recent lender disclosures and industry reporting. Actual offers vary by issuer, company size, sector and risk profile.
Ticket sizes: from small amounts (₹2–5 lakh) up to several crores for proven, higher-revenue firms; consumer D2C funding often in the ₹10 lakh–₹5 crore band for early growth. (Examples: public materials show GetVantage offering from tens of thousands USD up to mid-six figures; check lender pages for exact INR ranges.)
Revenue share (% of gross revenue): commonly 5%–20% of gross revenue per repayment period (monthly), depending on deal structure.
Repayment cap / total payback multiple: rather than a fixed interest rate, RBF typically uses a repayment cap stated as a multiple of the principal (e.g., 1.15× to 1.5× or higher). The combined effect of the revenue share and cap determines how long and how much you pay in aggregate. (Industry reports show fee ranges that map to these multiples.)
Tenor: finance is commonly structured over several months up to 18–24 months in practice; exact duration depends on revenue seasonality and the negotiated cap.
Fees & effective cost examples: press coverage indicates fixed fees or effective costs that vary with tenor — for example, some market reporting cites fee ranges like 10 –12% (context-dependent) for shorter tenors, which translates into higher annualized costs than simple bank interest but with the upside of non-dilution and flexible repayments. Always convert a quoted fee/cap + revenue share into an IRR or annualized cost for apples-to-apples comparison.
Typical eligibility & underwriting criteria:
While specifics vary, the most commonly requested attributes by RBF providers are:
Traction / revenue history: usually 6–12 months of verifiable revenue; some lenders require minimum monthly recurring revenue (MRR) or average monthly sales thresholds. (Many RBF platforms require demonstrable online sales for D2C.)
Online payment data / receivables: lenders often ask for payment gateway statements, bank statements, Shopify/WooCommerce/Amazon seller data or marketplace dashboards to validate revenue and churn.
Unit economics / CAC payback visibility: lenders prefer businesses where the loan will be used to drive measurable ROI (marketing / inventory) so they can project repayment from incremental revenue.
Founding team & churn metrics: for subscription/SaaS businesses, retention and gross margins matter more; for D2C brands, conversion and repeat purchase rates are scrutinized.
Benefits for founders:
Non-dilutive: Retain equity and control — RBF does not require giving up ownership.
Revenue-aligned payments: Cash outflows fall when sales fall, reducing default pressure during seasonal dips.
Faster decisions: Specialized RBF platforms can underwrite and disburse faster than traditional banks if you meet data requirements.
Good fit for ROI-positive growth spend: If you can confidently project additional revenue from marketing or restocking, RBF lets you scale without equity dilution.
Downsides & risks founders must consider:
Cost vs. cheap bank credit: Effective annualized cost can be high compared to secured bank loans — always compute IRR and compare alternatives.
Revenue share reduces gross margins: Paying a slice of revenue each month reduces operating cash available for reinvestment.
Capped but front-loaded cost: Even though payments flex, the repayment cap may mean you repay a significant premium if revenue ramps quickly.
Data & operational covenants: Lenders may require access to payment gateways, bank accounts, or impose covenants (e.g., limits on additional borrowing) which are operational constraints.
A sample (illustrative) term sheet — how to read it:
Principal: ₹50,00,000
Revenue share: 10% of gross monthly revenue (collected monthly)
Repayment cap: 1.3× (means total repayment target ₹65,00,000)
Estimated tenor: depends on sales — if average monthly sales = ₹25,00,000, monthly payment = ₹2,50,000 → estimated months to repay = 26 (₹65L / ₹2.5L). If revenue increases, tenure shortens; if revenue falls, tenure lengthens.
Fees / setup: one-time processing fee (e.g., 1–3% typical) + due diligence charges.
Covenants: access to payment gateway and bank statements; no additional secured borrowing without consent.
This highlights why founders should model several revenue scenarios (base, up, down) when evaluating RBF — the same deal can feel cheap if revenue accelerates, or expensive if growth stalls.
How to evaluate offers & negotiate:
1. Ask for an IRR / annualized cost in multiple revenue scenarios. Convert the revenue share + cap into comparable cash-flow metrics.
2. Compare to alternatives: venture debt, bank working capital, or small equity raises — consider dilution, covenants and cost.
3. Negotiate the repayment cap and percentage split. Sometimes a slightly higher cap with a lower revenue share is preferable if you expect growth.
4. Protect operational access: limit lender access to read-only to analytics / gateways; push back on onerous exclusivity or cross-default clauses.
5. Get clarity on triggers: what happens if revenue dips sharply? Are there minimum monthly payments? Are there early-repayment discounts?
Practical checklist before applying
Clean and export 6–12 months of bank statements, payment gateway data, marketplace dashboards and GST returns.
Build 3 revenue scenarios and model repayment paths.
Know the exact use-of-funds and expected ROI (e.g., marketing campaign with target ROAS).
Review legal covenants with counsel — especially access rights, data sharing and default events.
Final thoughts — is RBF right for your startup?
RBF is a useful, founder-friendly way to access growth capital without dilution — particularly for D2C brands, marketplaces, subscription / SaaS businesses and other companies with predictable gross receipts. It’s not a free or necessarily cheap source of capital, so treat every offer like a product you must model carefully across scenarios. For founders who value control and have repeatable revenue channels and strong unit economics, RBF can be a powerful lever — but for low-margin, volatile businesses the revenue share can be a heavy drag on cash flow.
Please connect on Whatsapp on 98200-88394 or email to intellex@intellexconsulting.com , if need any guidance to raise Revenue Based Finance
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