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The retail giant launched Amazon Lending over 10 years ago. And though it still is an invite-only initiative, the past decade is testament to its reliability.

The program made $862 million in small business loans in 2019, according to Market Insider. Such a success reveals how much brands rely on Amazon Lending.

However, a lot of merchants are still unaware of its benefits.

Today, we explore how sellers can use Amazon Lending to scale up their business, with little to no money.


What is Amazon Lending?


Most banks prefer to lend capital to businesses owning physical collaterals. Online sellers have a hard time asking for loans for this very reason. But that’s what programs like Amazon Lending are for.

Amazon launched its lending program in 2011. Its goal is to help seasoned brands scale up their business. This is also a great initiative for new sellers looking to kickstart their sales journey.

Image source: Amazon

The program offers business financing loans from $1,000 to $750,000 for up to 12 months.  This gives sellers the opportunity to expand their businesses to scale up sales.

Amazon Lending requires less paperwork and wait times. There’s also multiple financing options, and no credit checks.

Prequalified sellers can choose the amount and term length that works best for them. Plus, there’s no penalty for prepayment.


Who Can Leverage Amazon Lending?


As we said above, Amazon Lending is an invite-only program exclusive to Amazon sellers. Moreover, not every merchant can apply for a loan.

The retail giant reserves business financing privileges for a select few. If your Amazon track record is clean, Amazon Lending may reach out to you and offer a specific loan amount.

Amazon determines seller eligibility using a set of algorithms that evaluate a brand’s selling history.

Related content: Amazon Seller Wallet


How Does Amazon Lending Work?


Amazon Lending works with third-party services to offer unique financing tools to sellers. These Amazon Lending partners can offer 4 financing options:

  • Term Loans. This is a non-revolving, lump-sum funding option. It’s provided by Amazon Lending and Lendistry. Term loans require compliance with a specified payback time frame.
  • Interest-Only (IO) Loans. It offers sellers the option to repay on interest-only for a specific time. After said period expires, loaners must pay the principal loan amount, along with the interest rate.
  • Business Line of Credit (LoC). Marcus by Goldman Sachs provides this financing service. It offers sellers funding, based on their credit limit. You’ll only pay interest on the actual funds used.
  • Merchant Cash Advance (MCA). MCAs tie loan payments to a portion of your future sales. This funding option is provided by Parafin. It offers brand flexible payment, with no collaterals and no late fees.


What is the interest rate for an Amazon loan?


There’s no exact consensus regarding the Amazon Lending interest rates. Seller reports estimate that they range between 6%-17%.

Credit cards offer an annual percentage rate (APR) of 14%-20%. And merchant cash advances usually begin at 15%. So, Amazon’s rates are lower than traditional loan options.

Your final interest rate will depend on the Amazon business loan that you request.

Also, note that Amazon Lending requires no additional fees from sellers. For example, you won’t have to pay origination, application, and closing fees. There’s also no and prepayment penalties involved.


How to Use Amazon Lending


Keep in mind that Amazon’s customer-centric approach rules each and every aspect of their business model. Therefore, before applying for a loan, please consider the following criteria:

  • Have a 1099-K Registration in a US state where Amazon Lending is available.
  • Provide stellar customer satisfaction. Keep good track of your Amazon metrics so you don’t fall below expectations.
  • Offer proof of non-serious customer complaints.
  • Provide non-outstanding copyright or trademark infringement complaints.
  • Your product listings should comply with Amazon’s style guides. You can learn how to optimize your listings here.

Both individual and professional sellers can apply to Amazon Lending. However, you’ll only be able to choose one of the offers available.

Image source: Helium10

If you’re ready to start the process, take the following steps:  

  1. Log in to Amazon Seller Central.
  2. Check if your business is prequalified to apply for any financial solution.
  3. Choose the amount and term length that makes sense for your business.
  4. Submit your business loan application provided by Amazon.
  5. Access your funds in Seller Central account within five business days.


Amazon Lending Criteria


Amazon Lending takes around 5 business days to approve and disburse loans. Third-party services may require more time to complete the process.

Note that Amazon might prompt you to submit additional data before approving your loan. You can check your loan status and history in Seller Central.

Loan payments are deducted automatically from your seller account. In the event that there aren’t sufficient funds in your account, Amazon will deduct the remaining balance from your next disbursement.

You can submit your FBA inventory as collateral. In case of non-repayment, Amazon may take hold of your inventory to sell it. When non-FBA sellers can’t pay their loans, all sale profits may go directly to Amazon.

Note. When you apply for a new loan, make sure you have not received any previous loan in the past 45 days.


Is Amazon Lending Right for You?


Remember, the marketplace wants you tied in. Amazon is a business, after all. It’s lending you money so that you can sell more and get them a bigger cut. And that’s on top of your interest payments.

Think about it. As a seller, you’ll use the loan amount for inventory expansion, but only within the marketplace. 

As stated by Amazon Lending, these are some of the typical uses for the loan:

  • Buying inventory
  • Gaining cost or production efficiency
  • Bulk buying
  • Investing in product development
  • Advertising costs
  • Building business infrastructure

You won’t have the option to use the money elsewhere. Plus, you’ll have to pay, no matter how much you make.

It may be easier to just give Amazon a fixed amount every month, but only if you are consistently doing well. Paying a fixed fee instead of a percentage means that you pay the same amount even if you’ve had a bad month.

This can all be achieved with a great deal of effort and organization.

Luckily, there isn’t an early payoff penalty. So, you can repay your debt as soon as you get back on your feet. This type of financial help can help you develop key strategic planning skills to catapult your Amazon business to stardom.


Final Thoughts


Inventory expansion, digital marketing strategies, and product listing optimization. Online brands must invest in these to drive sales. But this requires working capital.

Amazon is in a good position to make short-term business loans. This is especially true for merchants that do most of their selling on Amazon.

If that’s your case, then Amazon Lending might be the solution for you.

So, apply to the program and wait for an invite. The marketplace holds the necessary data to know that you’ll comply with the program’s rules.

Plus, you won’t deal with a regular bank’s regulations, which can be very strict.



  • AMZ Advisers

    AMZAdvisers is a full-service eCommerce & digital marketing consultancy with extensive experience in creating high-growth strategies for brands and manufacturers on Amazon. We believe that developing a robust eCommerce presence is integral for a business looking to maximize growth in the 21st century. Our custom strategies aim to make Amazon a powerful sales channel and the centerpiece of every company’s eCommerce presence.

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