The ecommerce giant first put its stake in the small-business lending ground in 2011 when it launched Amazon Lending. By mid-2017, the Seattle-based company had loaned in excess of $3 billion to more than 200,000 small businesses across the U.S., U.K. and Japan.
“Small businesses are in our DNA,” Peeyush Nahar, vice president for Amazon Marketplace, said in a statement. “Amazon is providing capital to small businesses to help them expand inventory and operations at a critical period of their growth.”
In early 2018, news sites reported that Amazon had partnered with Bank of America to better mitigate the credit risks with a large-scale lending program, sparking rumors of a potential expansion. Representatives from both companies have declined to comment publicly, though.
Notably, the lending program is available by invitation only. That means there’s no public application page or any way to initiate a loan request, even for active sellers on the ecommerce site. Instead, Amazon invites sellers to apply for a quick infusion of cash, ranging from $1,000 to $750,000. More than half of the borrowers who utilize Amazon Lending eventually take a second loan from the lender, according to the company.
Amazon Lending offers small business loans between $1,000 and $750,000 for a term of up to 12 months. The company does not disclose interest rates, though, according to the lender, more than half of borrowers eventually take a second loan with Amazon Lending.
Although there don’t seem to be any revenue thresholds, Amazon Lending is an invite-only lending program. You must be an active seller on Amazon Marketplace to be eligible for an invitation and you must meet certain nonpublic performance metrics. The Amazon seller message boards frequently post questions and testimonials from people who have or are interested in applying for a loan through the program.
If you are not an active seller on Amazon Marketplace, you are not eligible for an Amazon Lending loan.
Amazon invites borrowers to apply directly from their seller accounts. There’s no way to initiate an application without first being invited to apply, and Amazon is mum about exactly what helps someone get chosen for an invitation.
|Strong sales (not just credit score) weigh into lending decision||Short repayment period|
|Fast, streamlined application process||Invitation-only application process|
|High potential loan amount||Few fine-print details available in advance|
Active sellers on the Amazon marketplace who need an influx of cash to support things such as greater inventory or scaling operations. Amazon Lending is best for borrowers who are comfortable repaying the loan in 12 months or fewer.
Amazon seller forums can be a lively resource for crowdsourcing questions and getting feedback on the lending process. Because the company is so tight-lipped about program details, it can be hard to figure out whether you might soon qualify for an application invite, making this a potentially frustrating option for small business owners who are proactively looking for a loan.
If you have a strong sales record on Amazon Marketplace and are in need of some cash to expand your offerings or get through an inventory crunch, Amazon Lending might be a worthwhile solution.
Because the company already has access to your personal and sales info and is able to integrate repayment directly through your seller account, it can be a streamlined and speedy way to navigate a loan.
Amazon Lending isn’t for everyone — by design. You have to be invited to apply, and if you take the loan you’ll have to be confident you can repay it quickly. For borrowers who are proactively seeking a loan or who need a longer loan term, other lenders might be a better fit.