What is Amazon Lending? (Everything You Need to Know is Here)

Financing your own business is a time-consuming and challenging job. The source of funding may be the key to the success or failure of your business. Amazon Lending is a program that offers loans to small and medium-sized businesses that sell on Amazon.com. If you’re interested in knowing more, then read on.

If you're an Amazon seller or considering becoming a seller in the future, starting with a good idea is essential. But this idea should also be well thought out and could help you get ahead. There are several ways to get your project funding without going to venture capitalists or banks. There is an Amazon ending the program. You might be wondering what Amazon lending is. Well, read on to learn more.

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What is Amazon Lending?

Amazon Lending is a program that offers loans to small and medium-sized businesses that sell their products on Amazon. You use the loans to help these businesses grow and expand their operations. Amazon determines the interest rates and terms of the loans, and you repay the loans through a percentage of the sales made on Amazon.

To be eligible for a loan from Amazon Lending, businesses must have been operating for at least one year, have a good credit history, and generate at least $10,000 in monthly sales through Amazon. Businesses can apply for a loan of up to $100,000 within two years. The APRs for the loan will range between 8% and 9.9% through the Amazon Lending website.

How Does Amazon Lending Work?

In partnership with Lendistry, Amazon developed an Amazon lending program to help small- medium-sized businesses. Amazon Lending is a program that offers loans to small and medium-sized businesses that sell on Amazon.com. The program is meant to support underserved populations such as:

African American-owned businesses
Female owned businesses
Low-income businesses
Hispanic and Latino-owned businesses

Lendistry plans all support required for the program to be efficient. Support such as resources, webinars, consultations, and classes.

For sellers To be eligible for a loan, they must have been active on Amazon for at least 12 months, have a good payment history, and have a business bank account. Loans are not available to individuals.

Once approved, businesses can receive their loan as a lump sum or in installments. Repayment begins automatically once amazon funds the loan is funded by amazon, and businesses can make early repayments without penalty.

What Is Lendistry?

Lendistry is a Community development financial institution that offers small business loans and lines of credit. It is a non-profit organization that assists small businesses with technical support and resources through The Center by Lendistry.

Lendistry offers loans of up to $100,000 with interest rates starting at 7.99% and repayment terms of up to 24 months. The company also offers lines of credit with interest rates starting at 9.99%.

The company's mission is to provide financing to small businesses underserved by traditional banks. Lendistry has provided over $100 million in funding to more than 1,000 businesses across the United States.

Who Is Eligible for Amazon Lending?

The Amazon Lending program is currently available to small and medium-sized businesses. To be eligible for a loan, you must be a seller on Amazon for at least one year or have a pro merchant account. The business must have a good credit history and meet other eligibility criteria.

As an Amazon seller, you may be eligible for a short-term loan from Amazon Lending. This financing option can help you grow your business by providing access to working capital.

To take part in Amazon Lending:

Login to your Seller Central account.
Check for the Amazon Lending message for eligibility.
If you are eligible, you will see one or more financing options with related terms. Select the option that best meets your needs.
Complete the application and provide any requested information. Once your application is submitted, Amazon will review it and decide.

Amazon will deposit the funds into your account within five days if approved. You will then have access to working capital that you can use to purchase inventory, invest in marketing, or for other business purposes.

Amazon automatically deducts repayments from your future earnings, so there is no need to make monthly payments. However, it is essential to note that failure to repay the loan could impact your future ability to sell on Amazon.

What is Financing Options Available through Amazon Lending?

Amazon Lending provides several different financing options for customers. Customers can choose from interest-only loans, and term loans typically offer varying rates and terms. Interest-only loans allow you to pay only the interest on your loan, while term loans require payments at regular intervals. Amazon will also offer an option of both, which combines both of these options into one loan.

How Much Can Small Businesses Borrow From the Amazon Lending Program?

The maximum loan amount that a small business can borrow from the Amazon Lending program is $100,000, while the minimum amount is $10,000. The interest rate is between 8% to 9.9% per year, and the period given is up to 2 years on loan.

How Long Does the Amazon Lending Application Process Take?

The Amazon Lending application process is designed to be quick and easy. If you're an established Amazon seller with a solid credit history looking to get a loan, the application process should take five business days.

Once your application is approved, you will receive an offer letter with the loan terms. If you accept the loan terms, you can access the funds as soon as the next business day. However, depending on the documentation required to approve the loan, it may take longer.

The Amazon Lending Application Process for third-party businesses may take different durations depending on the transactions that will be required.

How Does Amazon Assist Small to Medium Businesses on Its Online Store?

Since its inception, Amazon has strongly supported small and medium-sized businesses. Amazon.com is a direct seller of products on its online store. The company has millions of third-party sellers that sell their products through the Amazon Marketplace, and these sellers ship the goods to customers directly from Amazon warehouses. Amazon does not directly sell any of these products but connects them with customers looking for specific products or services.

How Can Amazon Financing Options Help Grow Your Business?

If you’re an Amazon seller, you may wonder how Amazon Lending can help your business grow. After all, access to financing can be a critical factor in determining whether or not a business is thriving.

Fortunately, Amazon Lending offers several financing options to help sellers grow their businesses. For example, sellers can access loans of up to $ 100,000, which you can use for various purposes, such as inventory expansion or working capital.

Additionally, the interest rates on Amazon Lending loans are generally lower than those offered by traditional lenders. It can save sellers money and allow them to reinvest those savings into their businesses.

Finally, Amazon Lending offers flexible repayment terms, allowing sellers to choose a plan that meets their needs. For example, sellers can decide to make weekly or monthly payments and prepay their loans without penalty.

All of these factors make Amazon Lending an attractive option for sellers looking to finance their business growth.

Conclusion

In partnership with Lendistry, Amazon Lending is a great way to get financial support for your business. It is easy to qualify for, and the interest rates are reasonable. You can get up to $100,000 with an annual percentage rate of between 8%-9%. You can use the money you borrow to grow your business or cover costs.