Funding your own business is not a simple task, but Amazon Lending is one of the newest ways to get instant cash for your business.
In this guide, we will review this new small business lending service from Amazon, detail who is eligible to apply, how much money is available, and more!
What Is Amazon Lending In 2023?
In partnership with Lendistry, Amazon developed the Amazon lending program. Its primary goal is to support underserved populations with business financing. Eligible businesses can apply for 2-year loans of up to $100,000 with APRs that range between 8% and 9.9% in 2023. Seller’s can easily apply on Seller Central and are generally approved within five days.
Amazon lending has many benefits for small to medium-sized business owners, so to find out more, keep reading for more interesting facts and tips!
How Does Amazon Lending Work?
Recently, Amazon partnered with Lendistry, a minority-led Community Development Financial Institution (CDFI), to finance small to medium-sized owned businesses through Amazon Lending.
Most of the funding from Lendistry is distributed to disadvantaged populations. Some of the targeted business demographics are as follows:
- Low-Income Businesses
- Female Owned Businesses
- African American Owned Businesses
- Hispanic and Latino Owned Businesses
In addition to lending, Lendistry provides specific resources, including one-on-one consulting, webinars, and on-demand classes. These would all be tailored according to the needs of the businesses served by Lendistry.
What Is Lendistry?
Lendistry is an established minority and female-led Community Development Financial Institution (CDFI).
Lendistry provides economic opportunities and progressive growth for small business owners and their underserved communities by financing them with the necessary funds they need, as well as educating them on financial literacy.
One way Lendistry does this is by offering small business loans and commercial real estate loans to help entrepreneurs grow their businesses.
When new to the lending world, these entrepreneurs turn to Lendistry for a loan to get them started on what they need.
In addition, Lendistry’s non-profit organization, The Center by Lendistry, connects small business owners with technical assistance and resources to better their businesses.
Who Is Eligible for Amazon Lending?
Amazon Lending is a service for business owners who have been trading on Amazon.com for at least a year and have a Pro Merchant account. To take part in Amazon Lending, follow the steps listed below:
1. Login to Your Seller Central Account
In order to determine if a seller is eligible for assistance, they must log in to their “Seller Central Account.”
2. Amazon Lending Message
When a seller is eligible to receive financing from Amazon lending, they will receive a message once they log in inviting them to apply.
3. Select a Financing Option
Next, the seller can select a financing option and amount that meets their business needs.
4. Complete the Amazon Lending Application
Finally, follow the prompted steps to complete the financing application.
What Financing Options are Available Through Amazon Lending?
Financial solutions from Amazon Lending and third-party lenders allow sellers to use different products.
These will vary based on what region you’re in, but may include interest-only loans or term loans for the U.S.-based businesses.
At any given time, your business might be eligible to apply for one or more financing options from Amazon Lending and select financial partners!
How Much Can Small Businesses Borrow From the Amazon Lending Program?
According to a recent press release, businesses can borrow between $10,000 to $100,000 from the Amazon lending program.
Additionally, loans can be borrowed for up to 2 years. Generally, the annual percentage rates for these loans range between 8% and 9.9%.
How Long Does the Amazon Lending Application Process Take?
Once a seller applies for a loan from Amazon Lending, the company will review their request and respond within five business days.
However, Amazon may require additional documentation or information to approve the seller’s loan request.
However, note that extra time may be required to complete this process to ensure that loans are issued responsibly.
With third-party lenders, decision time varies depending on each lender involved in the transaction and any applicable terms specific for such transactions about issuing credit products together with Amazon Lending.
How Does Amazon Support Small and Medium-sized Businesses on the Amazon.com Online Store?
Since 2020, Amazon has invested over $18 billion in third-party sellers on its website, including tools, services, programs, and infrastructure to encourage growth.
How Can Amazon Financing Options Help Grow Your Business?
Primarily, Amazon Lending’s goal is to help small and medium-sized companies grow their businesses.
For example, let’s say you have a jewelry shop and want to buy more equipment or expand your location. With traditional methods, it could be challenging to get this type of funding, but with Amazon Lending, it’s much easier!
With just a few clicks, sellers can now borrow up to $100,000 from Amazon at competitive rates. All you have to do is fill out an application on the website and wait for the approval.
Some of the ways that Amazon lending can help support small business growth are listed below:
1. Inventory Management
By using funds to buy inventory in bulk, sellers can better be prepared in advance of critical sales events
2. Enable Expansion of Your Company’s Product Line
In order to expand your business’s product line, you can use funds that can be used to reach new buyers
3. Attract New Buyers Through Improved Marketing Campaigns
Likewise, funds can be invested into new marketing campaigns to attract buyers and promote your company’s products to a broader range
4. Staffing Costs
Often, as a business grows, additional staffing needs are required, and with small business loans, companies can hire workers to handle increased business needs.
5. Operational and Manufacturing Costs
Similarly, as businesses grow, production increases, as do the operational and manufacturing costs of the company.
Therefore, loans can enable businesses to purchase items like equipment or trucks to transport products as the business continues to expand.
Amazon Lending is an advanced financing option for small and medium-sized businesses looking for help with working capital.
In partnership with Lendistry, Amazon Lending can help your business get more done by providing short-term loans of up to $100,000. Often, these loans are disbursed to underserved populations.