DoorDash, the US market leader in online food delivery, is launching DoorDash Capital in partnership with Parafin, a financial services technology company. It intends to provide revenue-based financing to eligible restaurants and DoorDash merchants to support investments in growth including purchasing equipment, hiring, marketing costs, rent, payroll, etc.

Eligible merchants will have access to pre-approved advances through the merchant portal and if they choose to accept the offer from Parafin, can avail of funds in 1–2 business days without further paperwork or impact on their credit score. Merchants pay a one-time fee over the duration of the advance payment and the financing comes free of hidden charges, recurring interest, and prepayment penalties. Repayment is automated and based on a percentage of the merchant’s DoorDash sales.

During the company’s pilot program, over 1,000 merchants used DoorDash Capital for various business needs and assigned the program a net promoter score of over 80.

The introduction of DoorDash Capital is a bid to secure merchant loyalty by providing services and offerings in direct response to restaurant needs. The move is reflective of the growing urgency for delivery marketplaces and aggregators like DoorDash to step up their game, as competing delivery platforms battle for ground amidst changing local regulations and digital innovations.