Scale Without Selling Out: The Definitive Guide to Revenue‑Based Financing (RBF) in India

Introduction

Revenue‑Based Financing (RBF) is rapidly becoming the go‑to alternative to equity dilution and traditional bank debt for many Indian startups and growth‑stage businesses. Instead of trading ownership for capital, businesses take an advance and repay it as a fixed percentage of future revenue until a pre‑agreed repayment cap (a multiple or flat fee) is reached. That means repayments flex with sales: if revenue dips, payments fall; if sales surge, the facility repays faster.

 

This article explains how RBF works in the Indian context, the pros and cons for founders, a practical checklist for comparing offers, and a ready‑to‑publish comparison table of leading RBF lenders active with India‑facing deals.

How RBF works — the essentials

 

1. Advance amount: Lenders base the amount on trailing revenue (monthly recurring revenue (MRR) or last 6–12 months’ gross sales) and your margin profile. Typical advances are expressed as a percentage of ARR/MRR or as a multiple of average monthly revenue.

2. Revenue share: You agree to remit a fixed percentage of gross revenue (commonly 3%–12%) until the repayment cap is met.

3. Repayment cap / multiple / fee: Lenders set either a flat fee (e.g., 6%–20% of the advance) or a repayment multiple (e.g., 1.2x–3.0x). This defines total cost and timeline.

 

4. Monitoring: RBF providers typically require read‑only access to payment gateways, bank accounts, accounting platforms or POS data to automate collections and monitor performance.

 

Because repayments are tied to revenue, RBF reduces mismatch risk in slow months — a key reason fast‑growing D2C, e‑commerce and SaaS firms in India are using it

 

Why Indian founders choose RBF (and when not to)

When RBF is ideal:

 

You run a subscription or SaaS business with predictable cash inflows.

 

You’re a D2C or e‑commerce brand with steady online sales and a clear CAC payback cycle.

 

You need growth capital for marketing, inventory or expansion and want to avoid equity dilution.

 

 

When to avoid RBF:

 

Low or highly volatile revenue with frequent negative months (revenue share may compound pressure in prolonged downturns).

 

If you can access low‑rate bank term loans or lines of credit with acceptable covenants and collateral.

 

 

Tradeoffs to accept: RBF is non‑dilutive but can be more expensive than long‑term bank debt when converted to APR. It’s a cash‑flow management tool more than a cheap source of capital.

 

 

 

Top RBF lenders & platforms (India focus)

 

Below are the prominent providers and the typical terms you can expect when negotiating. These descriptions are framed for quick publishing and editorial clarity.

 

GetVantage

 

Verticals: D2C, e‑commerce, SaaS, marketplaces

 

Typical advance: Small to mid‑range (tens of thousands to several lakhs/low millions INR equivalent)

 

Repayment style: Revenue share with a flat financing fee; commonly brief tenors (many growth advances repaid within 6–12 months)

 

Why founders use it: Fast onboarding, ecommerce integrations and marketing‑funding focus

 

 

Velocity (India)

 

Verticals: D2C & e‑commerce brands

 

Typical advance: Up to multiple crores depending on underwriting and product

 

Repayment style: Revenue share (flexible tenor up to 24 months in some deals)

 

Why founders use it: Scale inventory and paid acquisition quickly without giving up equity

 

 

Recur Club

 

Verticals: SaaS & subscription businesses

 

Typical advance: Based on ARR — platform advances meaningful fractions of ARR to fast‑growing SaaS

 

Repayment style: Revenue share tied to ARR; tenor commonly 6–24 months

 

Why founders use it: Tailored for subscription models with predictable LTVs and churn metrics

 

 

Efficient Capital Labs (ECL) / Cross‑border SaaS lenders

 

Verticals: B2B SaaS with revenue across geographies

 

Typical advance: Scales to larger facility sizes for qualified SaaS firms

 

Repayment style: Revenue share or structured RBF with tailored multiples

 

Why founders use it: Designed for customers with international revenue and enterprise contracts

 

 

Indifi & select NBFCs

 

Verticals: MSMEs, retailers, marketplaces

 

Typical advance: Small to medium unsecured business loans; some revenue‑linked products

 

Repayment style: Varied — some products use direct debit from bank accounts or revenue‑linked installments

 

Why founders use it: NBFC credit infrastructure and wide SME reach

 

 

Note on global players

 

International platforms (Capchase, Wayflyer, Clearco) have shaped RBF product design and — where available — bring deep capital pools; availability in India varies and often requires local partnerships.

 

 

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Side‑by‑side comparison — quick reference table

 

Lender / Platform Typical Advance Size (INR) Revenue Share (% typical) Repayment Cap / Multiple Common Tenor Best for

 

GetVantage ₹5 L – ₹2 Cr (varies) 4%–12% Flat fee (6%–15% typical) 6–12 months D2C, e‑commerce, SaaS

Velocity ₹10 L – ₹5 Cr+ 5%–10% Multiple or flat fee 6–24 months D2C / inventory heavy brands

Recur Club Based on ARR (fractional) 4%–8% (varies) Multiple (1.2x–2.0x often) 6–24 months SaaS / subscription businesses

Efficient Capital Labs ₹10 L – crores (scaled) Custom (based on risk) Custom multiple 6–36 months B2B SaaS, cross‑border revenue

Indifi / NBFCs ₹1 L – ₹2 Cr Varied (product dependent) Loan style / fees 6–36 months MSMEs, retailers, marketplaces

 

 

> Important: Most RBF deals are bespoke. Above figures are typical ranges used for comparison — lenders will underwrite case‑by‑case using revenue history, gross margins, churn and customer concentration.

 

 

 

 

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How to compare offers in practice — a 5‑point checklist

 

1. Translate the fee into a cash‑flow model: model repayments under low, base and high revenue scenarios. Compute total paid and implied APR for your expected timeline.

 

 

2. Clarify the definition of ‘revenue’: does it mean gross sales, net of returns/discounts, or revenue after channel fees? Get a precise contract definition.

 

 

3. Confirm monitoring and privacy limits: what platforms will they access, how long will read access last, and is it revocable?

 

 

4. Inspect default triggers and remedies: can the provider accelerate collections or divert revenue without a court order? What fees apply on breach?

 

 

5. Check prepayment terms: if you want to repay early, what discount or penalty applies?

 

 

 

 

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Legal & tax practicalities in India

 

GST & classification: The tax treatment depends on whether the arrangement is styled as a loan or a financing fee. Engage your CA to confirm GST and withholding obligations.

 

Documentation: Demand a clear term sheet, sanction letter and an agreement that defines revenue calculation, reporting cadence, data sharing, and default mechanics.

 

Regulatory clarity: RBF sits in a grey zone between NBFC lending and merchant cash advance product models — ensure the provider’s licensing fits the product.

 

 

 

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Red flags to watch for

 

Ambiguous revenue definitions or retroactive adjustments.

 

Unlimited data access requests or unrelated personal data demands.

 

Clauses that allow unilateral increase of revenue share or immediate sweeping of balances.

 

Hidden equity kickers disguised in side agreements.

 

 

If any clause looks one‑sided, get a lawyer to review before signing.

 

 

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Closing — is RBF right for your business?

 

RBF in India is a pragmatic tool for scaling predictable businesses without diluting ownership. It suits founders who need growth capital for marketing, inventory and expansion and who can tolerate short‑to‑medium term cash‑flow sharing. However, it isn’t a free or necessarily cheap source of capital; the smartest founders use RBF strategically for high‑ROI uses where incremental revenue will comfortably cover the revenue share.

 

Sudheendra Kumar ( Mobile /WhatsApp: 91-9820088394)

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