Boost your business with Amazon Lending
Boost your business with Amazon Lending

Sell ​​here, borrow here. Once you have a seller account with Amazon, you can borrow up to $750,000.



What is Amazon Lending?

Amazon launched Amazon Community Lending as a pilot program in 2011. From 2011 to 2019, borrowers secured approximately $710 million in funding.

Amazon Lending offers short-term business loans to qualified sellers. Sellers use the funds to obtain additional inventory. Amazon Lending works in partnership with Goldman Sachs and other third-party lenders.

Products available include term loans, interest-only loans and lines of credit for US-based businesses.

How does Amazon Lending work?

You must have an Amazon seller account. Loans are by invitation only. There is no credit check in the traditional style. Amazon automatically reviews certain metrics such as your sales volume and prompts you to apply.

What is the payment method? Your monthly payments are automatically deducted from your seller account based on a percentage of your seller account sales. If there is not enough money in your seller account to cover the loan payment by the due date, funds are withdrawn from the credit card information you provided when setting up the loan. ready.

There are different financial programs. You can follow the steps to choose the best one for you.

How does Amazon funding help you grow your business?

You get more ability to grow your business when you buy inventory.

You can expand your product range through better inventory management.

You can reach more buyers.

You can better position your business.

Am I eligible for an Amazon loan?

Once you create a seller account on Amazon Marketplace, Amazon will let you know. If you are not immediately eligible, you will not receive an invitation to apply for an Amazon loan. It’s one of the best small business financing options out there if you get the green light.

Amazon wants to improve and grow businesses owned by historically disadvantaged sellers and those with low to moderate incomes. During the online application process, Amazon does not consider your credit score as a factor when making a loan decision.

When you sell on Amazon, you may become eligible later due to sales volume. Eligible sellers can receive an invitation later.

How much can I borrow from Amazon Lending?

There are minimum and maximum loan amounts for each type of loan. You can borrow from $1,000 to $750,000. The majority of high value loans are lines of credit.

Does Amazon financing have high loan payments

The loan program has different loan rates. Lending rates are determined by loan size, term, and your credit quality as determined by Amazon.

As with all small business loans, you will incur additional charges for late payments. Annual interest rates range from 6.99% to 20.99%.

For line of credit loans, additional maintenance fees apply if you do not use 30% of your line of credit amount.

Amazon Loan Program vs. Traditional Small Business Loan

If you choose a bank loan, you will most likely be making payments from your business bank account. There are other factors that influence this result, such as utility and insurance payments. With Amazon Lending, you borrow money to buy inventory and use inventory sales through the online marketplace to repay the loan. It’s simple to track and analyze, compared to other business financing options, making it one of the greatest alternative lenders for small businesses. The only downside being that you have to be on the Amazon platform.

With Amazon Lending, prepayments are not penalized. If you make full loan payment sooner, clearing the loan early, there is no prepayment penalty. This means that with an early payment, you will benefit from interest savings.

As a credit option, Amazon’s business loan program is fast, with the time from application completed by the business to approved loans issued often within 2-5 business days. This is a huge plus for business financing options.

Typically, a small business loan requires a score of 600 and above, and a requirement that you have been in business for 12 months. Small businesses may get better interest rates on merchant cash advances, business credit cards, or a business line of credit from other lending institutions, but small businesses typically wait 2-3 months for a decision. Various fees may be associated with your loan. And even with a short-term loan, you may incur a penalty if you pay off your loan balance early, which is one of the major charges hidden in the fine print.

If you are unable to repay the loan by not making payments and your credit card is declined, Amazon may make an initial payment to the seller’s account. This means that Amazon can use and sell your remaining inventory to use against the repayment of your remaining loan.

5 steps to apply

Eligible businesses must be set up with a seller account on Amazon Seller Central. Here is a brief overview of the steps to follow:

1. Log in to your Amazon Sellers account on Seller Central

If you’re new to Amazon Sellers, don’t despair if you don’t get an invitation for a loan. As your business grows, Amazon will automatically take another look. After you have opened and managed your seller account for a while, you may become eligible for a loan.

2. Check eligibility

If you are eligible for Amazon loans as an Amazon seller, your online business will receive an invitation.

3. Choose a financing option

Choose your loan amount and follow the steps in the application process. Choose the option that best suits your business needs. You can choose a term loan, an interest-only loan or a line of credit.

4. Submit your application

Submit your Amazon loan application.

5. Wait for your request to be processed

You should get a response to your Amazon business loan application within 2-5 business days, with loans granted immediately.

Does Amazon financing affect credit?

No. If you seek financing from potential lenders outside of Amazon, they will not be able to access information about your Amazon lending activities. The issued loan and pending payments on the remaining balance are internal transactions within Amazon.

Does Amazon have 18 month financing?

No. Repayment terms can be up to one year.

You can get 18 months financing on a short-term business loan from a traditional lender.

Picture: amazon


LEAVE A REPLY

Please enter your comment!
Please enter your name here