Indian consumer brands are increasing their borrowing by an estimated 15%–20% this festive season as they prepare for demand across online marketplaces, traditional retail and quick-commerce platforms. The need to keep products available in more locations is putting additional pressure on working capital, particularly for direct-to-consumer (D2C) businesses that have limited internal cash reserves. At the same time, uncertain consumer spending is making it harder for brands to determine how much inventory they should purchase before the festive sales peak.
The financing requirement comes as businesses prepare for Diwali and other seasonal shopping occasions, when sales can influence a significant portion of their annual revenue. Lenders are expanding credit facilities for brands that need money for inventory, marketing and rapid replenishment. However, companies are also becoming more cautious about stock commitments, focusing on established products and using early sales data to decide when to reorder. The challenge is to remain visible and available across sales channels without borrowing more than the business can repay.
Key Takeaways
- Borrowing rises: Consumer brands are borrowing around 15%–20% more year-on-year for the festive season, according to executives cited by Mint.
- Quick commerce adds pressure: Brands increasingly need inventory across multiple local fulfilment centres and dark stores.
- Lenders expand funding: GetVantage has reported 120% year-on-year growth and is targeting ₹200–240 crore in festive disbursements.
- New financing pool: Recur Club has announced a ₹500 crore fund for D2C brands.
- Demand remains uncertain: A LocalCircles survey estimated that urban households’ festive discretionary spending could decline 6% in 2026.
- Brands are being selective: Businesses are prioritising established products, smaller initial orders for new offerings and data-led replenishment.
- Cash flow matters: Faster sales do not always translate into faster cash receipts because settlement schedules and credit periods vary by channel.
Why Consumer Brands Are Borrowing More
Festive periods create a financing challenge for consumer businesses because many expenses occur before sales revenue arrives. Brands need to purchase products or raw materials, pay manufacturers, arrange packaging, book advertising and distribute stock ahead of expected demand.
The financial pressure can be especially high for younger D2C companies. These businesses may be growing rapidly but lack the cash reserves, established banking relationships or operating cash flows available to larger consumer-goods companies.
Working-capital financing helps cover the gap between spending money to prepare for sales and collecting the proceeds from those sales. During the festive quarter, the requirement can increase as businesses expand inventory and marketing to capture seasonal demand.
According to executives cited by Mint, growth capital requirements at D2C businesses typically rise by as much as 35% during the festive quarter. This year, consumer-brand borrowing was reported to be approximately 15%–20% higher than a year earlier.
The figures reflect reported industry observations rather than a comprehensive measure of all consumer businesses. Nevertheless, they illustrate how seasonal expansion can increase financing requirements even when sales forecasts remain uncertain.
The cost of preparing for peak demand
Brands must commit money before they know exactly which products will sell, where customers will buy them and how quickly inventory will move.
A beauty company may need to stock popular products at several fulfilment locations. A food brand may need to buy ingredients and packaging in advance. A premium chocolate maker may need to prepare gift boxes well before the busiest shopping days.
If demand exceeds expectations, insufficient stock can mean missed sales. If demand falls short, businesses can be left with unsold products, tied-up cash and loan repayments.
Borrowing helps companies prepare for the opportunity, but it also raises the cost of getting the forecast wrong.
How Quick Commerce Is Changing Inventory Requirements
Quick commerce has changed how many consumer brands distribute products in Indian cities. Instead of relying exclusively on a central warehouse or a small number of large distribution centres, brands increasingly need inventory closer to customers.
Platforms such as Blinkit and Zepto use networks of local fulfilment centres, commonly known as dark stores, to support rapid deliveries. Products must be available at the location serving an order, not simply somewhere in the company’s wider distribution network.
This creates a different inventory problem. A brand may have enough stock nationally but still miss sales if its products are unavailable in the particular neighbourhood where a customer places an order.
Anmol Sahai Mathur, vice-president of marketing at MARS Cosmetics, told Mint that inventory sitting in a central warehouse is of limited use if it is unavailable at the location fulfilling a customer’s order. Maintaining stock across more locations can increase working-capital needs, although faster replenishment and stock turnover may offset some of the expense.
For brands, the trade-off is between wider availability and the amount of cash tied up in inventory.
Availability can determine sales
Quick-commerce customers often expect products to be delivered within a short period. If a product is unavailable, they may switch to another brand rather than wait for a restock.
Garima Kakkar, co-founder of fragrance brand Fraganote, described product availability as a defining feature of the channel. The risk is particularly relevant during gifting periods, when customers may want a specific fragrance or gift set at short notice.
However, not every brand experiences the same financing impact. Chocolate maker Smoor said quick commerce had increased its working-capital requirements only modestly because faster stock turnover helped compensate for the need to replenish more frequently.
The difference highlights the importance of product characteristics. Perishable or seasonal products, slow-moving premium goods and frequently purchased consumer staples can have very different inventory requirements.
Festive Borrowing Is Rising as Demand Becomes Less Predictable
The need to prepare for seasonal demand comes with a concern: consumers may not spend as freely as businesses expect.
A LocalCircles survey cited by Mint, based on more than 67,000 responses across 307 districts, estimated that urban Indian households’ festive discretionary spending would fall 6% to ₹1.97 trillion in 2026, compared with ₹2.1 trillion in 2025.
The estimate points to pressure on discretionary spending, with inflation, higher borrowing costs and the absence of the previous year’s goods and services tax (GST) rate-cut boost cited as contributing factors. It is a survey-based estimate, not a final measurement of all festive purchases.
Other market reports have also described uneven festive demand, with some D2C brands reporting sales below expectations despite year-on-year growth.
This uncertainty complicates inventory planning. Brands need enough stock to capture demand during a short selling window, but they cannot assume that last year’s performance will be repeated.
As a result, businesses are increasingly prioritising proven products and using smaller initial commitments for new launches. They are also relying on early sales signals to determine which products deserve additional inventory and marketing spending.
Lenders Are Expanding Working-Capital Financing
The growing requirement for short-term funding is creating opportunities for specialist lenders that serve consumer brands and online sellers.
GetVantage, a revenue-based financing platform, has reported 120% year-on-year growth and is targeting ₹200–240 crore in festive-season disbursements. Its financing approach uses business revenue and performance data to help assess a company’s capacity to repay funding.
Recur Club, a debt-financing platform, has announced a ₹500 crore fund for D2C brands. The company said it had facilitated approximately ₹275 crore for more than 100 such brands during the current financial year at the time of the report.
| Financing indicator | Reported figure |
|---|---|
| Increase in consumer-brand borrowing | 15%–20% year-on-year |
| GetVantage year-on-year growth | 120% |
| GetVantage festive disbursement target | ₹200–240 crore |
| Recur Club’s announced D2C fund | ₹500 crore |
| Recur Club financing facilitated in the current financial year | Around ₹275 crore |
| Brands supported by Recur Club | More than 100 |
Figures are based on lender statements reported by Mint and describe different measures. They should not be added together as a single estimate of total industry borrowing.
For emerging brands, specialist financing can provide an alternative to relying exclusively on conventional bank loans or founder capital. Revenue-based facilities may be structured around business performance, while other lenders offer debt based on underwriting criteria and repayment schedules.
However, financing is not free. Interest, fees, repayment commitments and the terms of the facility can affect profitability. Brands must ensure that the expected return from additional inventory and marketing exceeds the cost of borrowing.
Why Faster Sales Do Not Always Improve Cash Flow
Quick commerce can accelerate inventory turnover, but it does not automatically solve every working-capital problem.
Fraganote said its financing requirements are affected by the need to stock multiple quick-commerce locations, marketplace fulfilment and settlement timelines, and longer credit periods in offline retail.
These channels create different cash-conversion cycles. A business may sell a product quickly but still wait for payment to arrive. Meanwhile, suppliers, employees, lenders and marketing partners may need to be paid according to their own schedules.
The result is that sales growth and cash availability can move at different speeds.
Bhavik Vasa, founder and chief executive of GetVantage, said real-time data from digital channels is creating opportunities for cash-flow-based financing. Such information can help lenders assess business performance and structure working-capital facilities around operating activity rather than relying only on collateral.
For brands, the priority is to understand how much cash is tied up at each stage: purchasing inventory, distributing stock, fulfilling orders and receiving payment.
How Brands Are Limiting Their Financial Risk
Businesses are not responding to higher borrowing needs simply by buying more inventory. Several are adopting a more cautious approach to stock and marketing decisions.
Prioritising established products
Brands are placing greater confidence in products with a reliable sales history. New festive launches, particularly those with uncertain demand, are receiving smaller initial orders.
Fraganote, for example, is buying established fragrances with greater confidence while starting with smaller quantities of new Diwali gift sets. Early sales determine whether the company places additional orders.
Replenishing in stages
Staged purchasing helps businesses avoid committing their entire seasonal inventory budget before demand becomes visible.
Smoor said its in-house manufacturing allows it to replenish products during the season instead of committing to all expected requirements upfront. It also uses previous sales and the current mix of distribution channels to guide stock decisions.
Mars Cosmetics is similarly making commitments in stages where supplier lead times permit, using early sales signals to adjust replenishment.
This strategy reduces the risk of excess inventory, although it depends on suppliers being able to deliver additional stock quickly enough to capture remaining demand.
Spending selectively on marketing
Advertising is another source of working-capital pressure. Brands often increase spending during the festive period to improve visibility and attract customers, but higher advertising costs can reduce the returns from promotions.
Some businesses are focusing on awareness and product discovery on quick-commerce platforms rather than relying entirely on deep discounts. The objective is to attract customers while preserving margins.
If the cost of acquiring a customer becomes too high, additional sales may not justify the money spent on marketing and inventory.
What Happens If Festive Sales Fall Short?
The financial consequences depend on the size of the borrowing, the repayment schedule, inventory shelf life and the company’s ability to sell products through other channels.
Brands with flexible manufacturing or long-lasting products may be able to reduce the damage by selling remaining stock after the festive season. Businesses with perishable goods or products tied closely to a particular occasion may have fewer options.
Lenders also face risks when borrowers depend heavily on a short period of seasonal sales to generate cash for repayment.
GetVantage said repayment cycles had not yet been affected, noting that these facilities typically have shorter tenures and more frequent repayments than conventional business loans. However, its founder acknowledged that lenders might need to consider slightly longer grace periods if festive demand fell short of expectations.
That possibility illustrates why cautious borrowing and inventory management matter. A business should not assume that a strong sales period will automatically cover every loan obligation.
The Bigger Picture
The increase in festive borrowing shows how India’s shift toward rapid, location-based delivery is changing the financial requirements of consumer businesses. Brands need to place inventory closer to customers, maintain availability across multiple channels and invest in marketing before demand is fully visible. Those requirements can raise the amount of cash tied up in operations even when products sell quickly.
At the same time, uncertain consumer spending makes aggressive expansion riskier. Specialist lenders are responding with financing for inventory and cash-flow needs, but the sustainability of that lending depends on brands converting stock into cash and generating enough profit to repay their obligations. The companies that manage the festive season most effectively may be those that balance availability with disciplined purchasing, rather than those that simply stock the most products.
Looking Ahead
As the festive season progresses, brands and lenders will watch order volumes, product availability, inventory turnover and payment collection to assess whether the additional borrowing is translating into sustainable sales. Companies are likely to continue adjusting inventory and marketing in stages, particularly for products with uncertain demand. If sales disappoint, some brands may need to redirect stock, slow purchasing or negotiate additional time to meet repayment schedules.
For the longer term, quick commerce is likely to remain an important distribution channel for many consumer brands, but its contribution to growth must be weighed against the cost of maintaining stock across multiple locations. Access to financing can help businesses capture demand, yet working-capital discipline will remain essential. The central question is not just how quickly a product can be delivered, but whether the sale generates enough cash and profit to support the next cycle of growth.
Frequently Asked Questions
1. Why are consumer brands borrowing more this festive season?
Brands need more working capital to purchase inventory, distribute stock across multiple channels and pay for marketing before festive sales are realised. Quick commerce adds to the requirement because products may need to be available at multiple local fulfilment centres.
2. How much more are consumer brands borrowing?
Executives cited by Mint estimated that borrowing by consumer brands was around 15%–20% higher year-on-year this festive season. This is a reported industry estimate, not a comprehensive total for all brands.
3. Which lenders are financing D2C brands?
GetVantage and Recur Club are among the platforms providing financing to consumer and D2C businesses. GetVantage has targeted ₹200–240 crore in festive disbursements, while Recur Club has announced a ₹500 crore fund for D2C brands.
4. Why does quick commerce increase inventory costs?
Brands may need to keep products at multiple dark stores or local fulfilment locations so they are available when customers place orders. This can tie up more cash in stock, although faster turnover may offset some of the additional cost.
5. Are festive sales expected to decline in 2026?
A LocalCircles survey cited by Mint estimated that urban households’ festive discretionary spending could decline 6% to ₹1.97 trillion. This is a survey-based estimate, and actual spending may differ by category, household income and sales channel.
6. What happens if a brand borrows to stock inventory but sales are weak?
The business may be left with unsold stock and less cash available to repay loans. Depending on the product, it may sell inventory through other channels, reduce future purchases or seek revised repayment terms from lenders.
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