FAQs About Revenue Based Financing
General
What does Velocity offer?

Velocity facilitates revenue based financing in India for e-commerce businesses against a fixed fee of 5-8%. Unlike traditional financing options like VCs and Banks, our capital comes without any equity dilution, collateral or personal guarantees. Repayments are made as a percentage of revenues, and you can raise anywhere between Rs. 5 lakhs to 3 crores depending upon your business's performance and requirements.

Here is an example on how revenue based financing works. Let's assume Company A raises Rs 40 Lakhs from Velocity at a 6% fixed fee and 10% revenue share. In this case Company A would keep sharing 10% of its future revenue with Velocity till it pays back a total of Rs 42.4 lakhs (Rs. 40 lakhs + 6%*40 lakhs).

It's that simple! No other interest component, no processing fee. Nothing else. To know more, check out our comprehensive guide on revenue based financing that covers everything related to the topic.

How does Velocity's revenue based financing differ from other financing options?

Traditional financing options are broken.

Banks typically provide loans against collateral and seek personal guarantees, have long turnaround time and look for multiple years of profitability. Raising money from VCs is even more time consuming and results in equity dilution which in turn reduces control of your business.

Velocity offers a fast, flexible and non-dilutive alternative source of growth capital that currently doesn't exist in India. With revenue based business loans from Velocity, you can grow your business at your own terms without losing any equity.

Is Velocity's revenue based funding a substitute for Venture Capital? How is Velocity different from Venture Capital?

We believe that for many businesses, venture capital is not the best way to fund their growth. VCs look for really large markets and an exponential growth trajectory, factors which may not hold true for a vast majority of businesses. Velocity offers a great alternative to founders that are building a healthy, profitable business and at the same want to retain control of their business.

Even for businesses that do raise VC money, we believe equity capital should not be spent on repeatable, ROI linked spends such as digital marketing and working capital. Such businesses can raise revenue based financing via Velocity and significantly reduce dilution by 30-40% in every VC round.

Apply For Loan
Which type of companies can apply for revenue based financing from Velocity?

We exclusively work with only direct-to-consumer brands and eCommerce businesses which have at least 8 months of revenue history and minimum 5 lakhs of monthly revenues. If you fit in the above criteria, apply for revenue based financing on our website and you'll get a term sheet within 2 minutes!

If you are not an eCommerce business, please revisit us in a few months.

Which type of expenses can Velocity fund?

Velocity can finance all the expenses which are directly linked to your revenue. Primarily marketing and inventory spends.

How long will the entire process take?

Once you’ve filled up your online application which takes under 2 minutes, we get back to you within 24 hours. From application submission to the money being raised, the entire process wraps up within 7 days.

Information to be Shared
What information will I need to provide while availing revenue based financing from Velocity?

We request a few details like your expenditure on advertising, inventory and corresponding online revenues. Using this information, we revert with a term sheet in under 2 minutes.

We have built APIs that integrate seamlessly with sales platforms (Shopify, Amazon and WooCommerce), marketing platforms (Google, Facebook and Amazon Advertising), credit agencies and the GST portal. All this data is shared securely over our tech integrations and enables us to build a holistic overview of your business’s performance. The process is seamless and devoid of any friction.

Apart from the above, we need a few other basic details such as your PAN, business PAN, and historical bank statements.

We strongly believe that founders should focus on building their business instead of wasting time preparing pitch decks and financial projections. Therefore, we work with readily available data and documentation.

How safe is my data with Velocity?

We take data security and confidentiality very seriously. Everything that you share with us is 100% confidential and secured with bank-level encryption.

Fund access and disbursal related
After approval how can I access the funds? How will the funds be deployed?

Any funding that you need to access will be deployed via Velocity’s NBFC partners. While all your interactions will be with Velocity, a formal loan agreement will be signed between you and the NBFC.

You can easily access funds via the Velocity dashboard which provides easy options to add vendors, upload invoices and create payouts. It is a seamless netbanking alike interface. Within 24 hours payouts are transferred to your vendor’s account and you can verify the same on the dashboard.

Further, you can also use the dashboard to look at historical payouts and the repayment history.

Can I apply for subsequent rounds of financing from Velocity as my business grows?

Certainly! We at Velocity expect to be a long-term partner for your business. In fact as we develop a history with businesses, we frequently extend larger rounds at better terms!

Payback related
How is the repayment made?

Being founders ourselves, we know that revenues can fluctuate from month to month. One of the key reasons companies avoid debt is due to the fixed EMI obligation it creates irrespective of cash flows. To address this conundrum, we tie repayments to revenues.

Repayments are routed to Velocity directly via payment gateway splits, virtual accounts or NACH transactions. The entire process is extremely transparent and computations can be viewed in real time on the Velocity dashboard.

When will the repayments start?

Repayments start from the subsequent day of the first disbursal of capital.

What percentage of revenue will be taken?

The percentage depends upon your business needs, amount of capital raised and historical business performance. This can range between 5% to 20%

Can I deploy only a partial limit as I don’t have a requirement to deploy the entire limit?

Velocity offers a flexible deployment plan. To activate the facility, a small first deployment should be taken within 10 days. The remaining facility can be flexibly deployed over the next 2 months. In case of partial deployment, the fees charged and applicable revenue share will be reduced pro-rata to the amount of financing utilised.