Festive Season Prompts Debt Platforms to Widen Loan Access for Consumer and E-commerce Sectors
As the festive season approaches, debt providers may target their funding towards consumer companies with a dominant presence in the digital and e-commerce sectors.
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During the festive season, debt providers are likely to prioritize funding for consumer companies that have a well-established digital footprint and thriving online marketplaces. To assist e-commerce businesses, alternative financing platforms such as Velocity, GetVantage, and Klub are growing their loan pools.
A ₹400 crore fund has been established by Velocity, a cash-flow-based lender supported by Peter Thiel's Valar Ventures, to promote direct-to-consumer brands. This amount is more than 60% higher than what was raised during the festive period of the previous year. On the other hand, according to its founder Bhavik Vasa, GetVantage, a financial platform located in Mumbai, plans to provide up to ₹250 crore in funding to e-commerce businesses this year—nearly 30% more than it did the year before.
Seasonal highs around celebrations like Diwali and Navratri usually force e-commerce businesses to increase their marketing expenditures, stock up on inventory, and make quick deliveries—all of which can be challenging without enough working capital. Alternative debt capital has been a popular financing option for many consumer companies because it offers a speedy way to get funding without reducing equity.
