Access is invitation-only and generally limited to sellers with a proven track record and consistent sales.
Amazon Lending now only offers loans through third-party lenders, making direct financing unavailable.
Alternative financing options, like short-term loans, lines of credit, and inventory financing, may offer more flexibility for e-commerce businesses.
Comparing multiple lenders and understanding loan terms is essential to find the best rates and repayment options.
Amazon Lending offers a variety of loans to grow your business. While it can be a great option for some sellers, it’s only available by invitation — making it out of reach for some. But even if you’ve received an Amazon Lending invitation, it’s a good idea to consider all your financing options to find the right fit.
What is Amazon Lending and how does it work?
Amazon Lending used to offer direct financing to sellers in addition to third-party financing. As of March 6, 2024, Amazon stopped offering direct financing, though it still services existing loans.
Now, Amazon Lending only offers business loans to Amazon sellers solely through third-party lenders, such as Parafin, SellersFi and Lendistry, instead of lending money directly. For borrowers, this shift does not have a significant impact on the terms or availability of financing, but it highlights a new direction in Amazon’s approach to managing lending risks.
Loan options vary depending on where you live, but US-based Amazon sellers may be able to access term loans, lines of credit or merchant cash advances (MCAs). The details of these loan types aren’t available to the public, but they are promoted as having favorable rates and terms exclusively for Amazon sellers.
However, even if you’re eligible for a loan through one of Amazon’s partners, you’ll still want to weigh it against your other options to make sure you’re getting the best deal.
Amazon lending application process
To apply for these programs, you must receive an invitation from Amazon. Typically, businesses that have used Amazon for at least one year and have consistent sales are eligible. Check your eligibility by logging on to Amazon Seller Central. If you qualify, you will see a message from Amazon Lending.
Pros of Amazon Lending
Potentially competitive rates
Range of loan types
Streamlined application process for eligible sellers
Cons of Amazon Lending
Loan offers are only for Amazon sellers
Invitation-only access
No information about rates, terms or loan amounts
Alternatives to Amazon Lending
Traditional business loans don’t always meet the needs of Amazon sellers, and you may be able to find more affordable financing outside of the few lending partners Amazon offers. These financing alternatives may be more friendly to e-commerce businesses.
Inventory financing
Some lenders offer short-term loans backed by the inventory you’re purchasing. Typically, you can borrow about 80% of the value of the inventory. Often, inventory financing providers can send the funds directly to your supplier — and in some cases, you can finance your inventory before it’s manufactured.
While you can use pretty much any type of business loan to purchase inventory, e-commerce inventory loan providers like Kickfurther are often more streamlined than other types of lenders that offer business loans.
Rather than asking for paperwork, online inventory lenders connect with your Amazon seller account to underwrite the loan. Payments are paid back in monthly installments or as a percentage of sales. Often, you’re charged a fixed fee instead of interest, with APRs that can exceed 100%.
Pros
Direct payment to suppliers
Streamlined process without extensive paperwork
Flexible repayment options
Cons
High APRs may exceed 100%
Daily or weekly repayments are common
May require a down payment
Business lines of credit
Business lines of credit are designed to cover recurring expenses, like stocking up on inventory. Much like a credit card, these give you access to a revolving credit line for purchases or cash withdrawals whenever you need it. Many online business lenders, like BlueVine, offer lines of credit with fast applications and e-commerce sellers in mind.
Pros
Flexible use of funds
High credit limits
Builds business credit history
Cons
May charge fees on top of interest
Variable interest rates
May need good credit to qualify
Business credit card
Another option for flexible funding is a business credit card. They’re typically easier to qualify for than other types of business financing and can be used to purchase inventory or cover other business expenses. Most also have some type of rewards program and sign-up bonuses, such as 0% introductory periods up to a year.
But rates can be high, and you may run into foreign transaction fees depending on where you purchase your inventory. You may also need to provide a personal guarantee, which puts your assets at risk if you can’t make your payments.
Pros
May be easier to qualify for
Renewable source of funding
Rewards and signup bonuses
Cons
Rates can be higher than some options
May have to pay foreign transaction fees
May require a personal guarantee
Short-term business loan
For one-time expenses, short-term business loans from providers like OnDeck could be a better option than a credit line. While term loans from banks may be difficult for e-commerce sellers to qualify for, online lenders often have more flexible credit and revenue requirements. And loan amounts range from around $5,000 to $500,000.
Most charge interest plus fees — such as origination fees — and loan terms are usually between three and 36 months. The main drawback is that rates can get high, with APR over 60% in some cases. Some short-term loans may also require weekly or daily repayments, which may be harder to budget for.
With a merchant cash advance (MCA), you borrow a lump sum based on your expected future credit card sales. You’ll repay it as a percentage of your daily or weekly sales, plus a fee.
Since it’s an advance on future sales, it’s not based on your credit score. A merchant cash advance from a lender like Fora Financial could help if you’re having cash flow issues, but they tend to be very expensive and require frequent repayments.
Pros
Quick funding
Flexible repayment based on sales
Can qualify even with poor credit
Cons
Extremely high APRs, sometimes over 300%
Daily or weekly repayment requirement
Not a good long-term solution
Peer-to-peer business loan
A peer-to-peer (P2P) business loan is similar to a business term loan, except it’s funded by investors rather than a direct lender. Some small business owners prefer this option because it’s easier to qualify for than a bank loan. P2P platforms act as the intermediary between borrowers and investors. They oversee the application process, underwriting and repayment, but they don’t actually fund your loan.
You pay back these loans with interest and fees in monthly installments, which can be expensive. Because P2P platforms don’t have the same return on investment as direct lenders, they typically charge higher origination fees. Funding Circle is one P2P lender that specializes in business loans.
Pros
Easier to qualify for than traditional bank loans
Diverse investor pool could increase your chances of funding
Streamlined application process
Cons
Higher origination fees
Expensive monthly installments
Funding typically slower than other options
Personal loan
Personal loans are good for online merchants just starting on Amazon, as many lenders allow you to use a personal loan for business expenses. This type of financing relies on your personal income and assets rather than your business’s, with loans typically ranging from $2,000 to $50,000.
APRs on personal loans currently range from about 6% to 36% APR — sometimes including an origination fee of 1% to 10%. Like business term loans, you’re charged principal and interest that you pay back in monthly installments over two to seven years.
Pros
Accessible for new businesses
Flexible use of funds
Fixed monthly payments
Cons
Higher interest rates for lower credit scores
May charge origination fees
No payment flexibility
Home equity financing
For Amazon sellers who are also homeowners, leveraging your home’s equity is another option to finance your business and could get you the best rates of all your options. You may want to consider a home equity line of credit (HELOC) if you’re looking for an ongoing, renewable source of financing.
Or, if a lump sum loan makes more sense for your business, you could look into a home equity loan, which is similar to a business term loan. The biggest drawback of home equity financing, however, is that it puts your house at risk if you can’t make the payments. Plus, the loan process could take weeks, so it’s not a viable option if you need fast funding.
Pros
Lower rates than other options
Longer repayment terms
Only monthly payments required
Cons
Typically requires at least 20% equity
Puts your home at risk
Slow funding process
Compare a variety of business loans for Amazon sellers
These online providers may be a better option for Amazon sellers than a traditional bank loan. Compare personalized results by filling out the form with information about yourself and your Amazon store.
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What is the Finder Score?
The Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
How to decide which loan offer is best for your business
The best loan offer is typically the one with the lowest rates and fees, with payments you can afford. If you qualify, Amazon Lending partners may offer solid terms for sellers. However, if you’re new to Amazon or have other e-commerce websites, you may want to consider these other options:
Short-term loans. A short-term option like a merchant cash advance may work if you need fast turnaround and repayment terms based on your actual sales. Costs for short-term financing can run high, though.
Long-term loans. Best if you’re looking to expand beyond Amazon or need to refinance large debts. Term business, personal and peer-to-peer loans tend to offer the longest terms and highest loan amounts.
Lines of credit. This option can work well if you need more flexible financing. Borrow what you need when you need it, and use it for any purpose in your business — from financing more inventory to paying for a new marketing campaign.
How to increase your chance of approval
You might find it hard to get financing for your business through traditional lenders unless you have a proven track record of sales and revenue. The good news is that nontraditional lenders may offer loans to Amazon sellers, although you’ll have to meet certain criteria.
Look for loans designed for new startups and small businesses. Merchant loans, short-term loans and P2P loans generally have less stringent lending criteria than traditional loans. You can also investigate getting a business loan or personal loan from a lender specializing in bad credit — although they often charge higher rates to offset the risk.
The more you narrow your lender search to those likely to work with your type of business, the better your chances of approval. After gaining traction, develop a detailed business plan with a financial advisor to help you secure lower-cost financing.
Bottom line
If you’re eager for financing, signing the first loan you’re offered may be tempting. But building a business plan and comparing multiple lenders is key to finding the best rates and terms you’re eligible for.
Learn more about business financing and compare the eight most popular types of business lenders with our guide to business loans.
Frequently asked questions
Is Amazon Lending still available?
Amazon stopped underwriting business term loans directly but continues to service active loans and market third-party financing.
What are the eligibility criteria for Amazon Lending?
Specific eligibility requirements aren’t available to the general public, but Amazon suggests that ideal candidates have a proven track record of growing sales and high levels of customer satisfaction.
Does Amazon Lending affect credit scores?
Amazon says you can apply for Amazon Lending with no impact on your credit score. However, you should expect a hard credit check if you decide to accept an offer.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf.
See full bio
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