Types of Business Models: What Works Best for Indian SMEs
Choosing the right business model isn’t just strategy, it’s survival. The business model you follow impacts funding access, growth pace, and even customer retention.
Indian MSMEs are the backbone of the economy, contributing nearly 30% of the GDP and employing over 110 million people.
In this guide, we’ll break down the most relevant types of business models and how they shape your success.
Common Business Models in India
- D2C (Direct-to-Consumer): Sell directly to customers through digital channels. You control pricing, margins, and customer data, ideal for funding marketing, inventory, and fulfillment.
- SaaS (Software as a Service): Offer software on a subscription basis. Recurring revenue and low churn make it highly fundable through term loans or revenue-based financing.
- Marketplace: Connect buyers and sellers without holding inventory. Scales quickly and suits funding for tech development and vendor acquisition.
- Subscription: Deliver products or services on a recurring plan. Predictable revenue supports flexible repayment structures.
- Tech Services: Provide custom IT solutions or consulting. Best financed through working capital or invoice-linked loans due to long billing cycles.
- Logistics Tech: Digitize freight, delivery, or supply chain operations. Needs working capital and vendor financing for expansion.
Your business model shapes your access to capital. With Recur Club you get matched with the right loan structure based on your revenue flow and sector.
How to Pick the Right Model (and Funding Strategy) for Your SME
The right model doesn’t just help you grow, it helps you raise capital faster and with fewer conditions. Here’s what to consider:
- Customer Fit: Know your audience, B2B SaaS and D2C demand different sales cycles and engagement.
- Revenue Type: Subscription models bring predictability; one-time or project-based models need stronger cash flow management.
- Scalability: Asset-light models (like SaaS or marketplaces) scale faster and attract flexible funding.
- Capital Needs: Inventory-heavy or operationally complex models may require structured, higher-ticket loans.
How to Get Funds for Your Business Model?
Funding options vary based on how your business earns, scales, and operates. Here are a few commonly used structures in India:
- Working Capital Loans: For managing day-to-day operations, vendor payouts, and inventory.
- Structured Term Loans: For planned expansion or large-ticket needs with customized repayment.
- Revenue-Based Financing: Suited for subscription or predictable revenue models—repayments linked to income.
- Invoice Discounting: For businesses with long receivable cycles, especially in B2B tech services.
- Vendor and PO Financing: Helps fund supplier payments or fulfill large purchase orders on time.
Recur Club simplifies access to all of these with just one application. You get matched with offers from 125+ vetted lenders including Tata Capital, HSBC, and Aditya Birla, based on your model and financials.
Over 750 Indian companies have already raised over ₹1200 Cr through the platform, backed by a dedicated capital expert at every step.
Case Study: Wellversed – How D2C Brands Scale with Debt
With just ₹60 lakh in traditional debt, Wellversed struggled to scale. After raising ₹6.5 crore, the brand expanded rapidly, driving 117% revenue growth and a 63% EBITDA increase, without giving up ownership.
Conclusion
Whether you’re bootstrapped, venture-backed, or revenue-first, funding should match your model, not work against it.
Apply once. Compare offers. Get funded in 48 hours.
Whether you’re in SaaS, D2C, EV, health tech, logistics, or manufacturing, tailored capital is available, secured or unsecured, from ₹10 to ₹100 crore.
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