Amazon Lending Review

Pros

• No credit score requirements
• Rates tend to be inexpensive
• Applicants can be quickly prequalified
• The application process is fast and easy

Cons

• Only available to Amazon sellers
• Website advertising is not informative
• Funds can take a while to disburse (up to five business days)

What Is Amazon Lending?

Amazon Lending, or Amazon Seller Lending, is a business financing option for Amazon merchants. With Amazon seller lending, merchants can receive a term loan, interest-only loan, line of credit, or merchant cash advance. Amazon doesn’t heavily promote its Amazon seller lending service, and the application isn’t open to just anyone. Instead, Amazon Lending is invitation-only. Overall, Amazon Lending is a good lending option if you qualify for it, but its invitation-only structure is the main reason this lender scores a 3.2/5 overall.

Through Amazon Lending, qualified borrowers can receive small business loans to purchase inventory to sell on Amazon. You can also use these loans for certain other expenses, such as marketing. If you’re an Amazon seller or plan to become one in the near future, read on to learn more about Amazon small business loans.

Amazon Lending Services Offered

Amazon Lending provides the following loan types to qualifying Amazon sellers:

• Term Loans: Amazon offers a variation on the short-term loan. Short-term business loans extend the borrower a lump sum of cash for (typically) a flat fee. Repayments are made daily or weekly over a loan’s term, which is usually under one year.
• Interest-Only Loans: This type of funding allows the borrower to pay only interest on the loan for a set amount of time, after which you must start paying down the principal of the loan.

In addition, Amazon sellers can access some lending products from third-party entities, such as Goldman Sachs, which offers a line of credit. Some other partnered lenders and lending products include Parafin (Amazon merchant cash advances) and Lendistry (Amazon Community Lending). If eligible, you can even receive multiple financing products at the same time.

While Amazon provides a large variety of helpful lending options, the company gives no information about the borrowing amounts available, resulting in a 3.8/5 star rating for this section.

Amazon Lending Borrower Qualifications

To get an Amazon Lending loan, you must receive an invitation from Amazon. Only registered sellers are eligible.

Loan offers are made to sellers who would most benefit from a loan to expand their businesses. Amazon is not transparent with its lending requirements, but historically sellers have had to meet an Amazon selling history of at least one year and total sales of at least $10,000 in the previous year. This lack of transparency gets Amazon Seller Lending a 3/5 star rating for this section.

Amazon Lending Rates & Fees

Amazon Lending has not publicly disclosed the specific terms and fees associated with its loans. It does disclose borrowing limits and maximum repayment terms. It is this lack of transparency that lowered Amazon’s rating to 1.8/5.

The company has stated that interest rates for its loans are lower than typical interest rates for business credit cards. For reference, most business credit cards have interest rates from around 14% to 24%. Past and current Amazon Lending borrowers report receiving annual interest rates as low as 6% up to 14%. While rates and fees are not disclosed upfront, there is a calculator within the application where you can see what your monthly repayments would look like before applying.

Loans issued directly from Amazon Lending have terms of up to 12 months, though loans made through partner Lendistry/Amazon Community Lending can have terms of up to 5 years. Fixed payments are automatically deducted from your Amazon account each month. You may also choose to have your payments taken out bi-monthly if that works better for your business.

If your Amazon account has insufficient funds to cover your monthly payment, the payment method linked to your account will be charged. If Amazon can’t pull the funds from your account, the company has the right to seize inventory and sell it to pay off your debt.

Amazon Lending Application Process

The application process for the Amazon loan program is simple. Unlike most loans, you won’t have to seek out the application yourself. Instead, you’ll receive an invitation through the Seller Central homepage and your email address linked to your Amazon Seller account.

Once you receive your invitation, you have three options. First, you can accept the loan offered to you. You can also decline the loan. Finally, you can lower the borrowing amount if you choose.

Amazon Lending is different from other lenders in its paperwork requirements. Most small business loans require a lot of personal information and documentation. Since Amazon Lending’s loans are based on the performance of your Amazon business, the company already has most of the information it needs. You won’t have to gather your tax returns, credit reports, and other documentation.

Once you’ve received your invitation, fill out the short application and select the amount you wish to borrow. Most loans are approved within 24 hours, but it could take up to 5 business days for the funds to hit your account. It’s important to note that even with an invitation to borrow, you may still be declined following Amazon’s review of your account.

The ease of the application process works in Amazon’s favor, but the slower processing times lower the lender’s overall rating for this section to 3.3/5 stars.

Amazon Lending Sales & Advertising Transparency

Amazon Lending does not promote its Amazon small business loans to just everyone. Since it’s an invitation-only financial service, a lot of the information about the product isn’t readily available. Therefore, anyone who has not received a loan offer will not be able to see details about the rates, terms, and details of Amazon Lending’s products.

However, sellers who have scored an invitation report receiving clear rates and terms for the loans that are offered, earning Amazon Lending a 4/5 score in this category.

Amazon Lending Customer Service & Technical Support

Amazon offers multiple customer service outlets for Amazon Lending customers.

Borrowers can contact Amazon Lending by phone or through a dedicated email address. Borrowers can also use the Seller Central dashboard to view information about their loans or ask and respond to questions about loans using the Amazon Services Seller Forums. There is no dedicated lending support agent assigned to you, but overall Amazon provides good customer support options and users have generally positive feedback regarding the support they receive.

It is the quality of customer service and the numerous support options that contributed to our 4/5 rating.

Amazon Lending User Reviews

Because Amazon Lending is an invitation-only service available to Amazon sellers, finding reviews and testimonials is a little tough. Amazon Lending reviews also often get lumped in directly with Amazon Seller reviews or general Amazon reviews, making it difficult to find specific feedback on Amazon Lending.

Since finding Amazon Lending reviews specifically is so difficult, the review aggregate rating of 4.6/5 is based on Amazon Seller customer reviews. However, sellers have taken to Amazon Services Seller Forums and other places online to discuss the benefits and drawbacks of Amazon’s lending service. Overall, Amazon Lending reviews are mostly positive, though there are certainly some dissatisfied users of the service as well.

Negative Reviews & Complaints

The most common complaints include:

• No Future Loan Invitations: Some borrowers reported being dissatisfied about not receiving invitations to refinance. Others reported that after paying off their loans, they were not offered additional financing.
• Rates & Terms For Refinancing: Some Amazon sellers that received refinancing offers complained that the new loans came with less favorable terms and rates.
• Six-Month Terms For New Borrowers: Several first-time borrowers say that they were only given terms of up to six months for their loans. Borrowers who have received multiple loans reported that additional term options of nine months and 12 months were made available after paying off the initial loan.
• Potentially High Cost Of Borrowing: Some Amazon sellers who received loan offers expressed concerns over the high cost of borrowing. For others, however, the convenience of obtaining the loan was worth the additional costs.

Positive Reviews & Testimonials

Positive Amazon Lending reviews point out the following attributes of the service:

• Easy Application Process: Borrowers who have accepted loans from Amazon Lending liked how easy it was to apply for the loan and receive funding. Though some borrowers reported that rates were higher than those of a bank loan, many felt that the easy application process was worth the extra expense.
• Low Credit Requirements: Other borrowers liked that personal credit scores were not an important factor in loan approvals. These borrowers reported that they were unable to obtain credit from other sources but received large business loans from Amazon Lending without any hassles.
• High Borrowing Limits: Borrowers also liked the high borrowing limits provided through Amazon Lending.
• Potential For Multiple Loans: Even though some borrowers complained that they did not receive additional loan invitations, other Amazon sellers said they have received multiple loans. Amazon claims that over half of the small businesses that have received loans return for a second loan.

Final Verdict: Is Amazon Lending Worth It?

If you’re an Amazon seller who is ready to boost your eCommerce business and increase your inventory, financing from the Amazon loan program, Amazon Lending, may be right for you. Unfortunately, you don’t get to decide when to take the loan since Amazon small business loans are available only by invitation.

However, if you continue to make sales and abide by Amazon’s policies, you may get an invitation sooner than you think. If and when you do receive an invitation, carefully evaluate the total cost of borrowing and your monthly payments to make sure it’s an offer your business can handle.

Amazon Lending’s competitive rates and relaxed credit requirements make it a great choice for borrowers who don’t qualify for other types of financing. However, the fact that you must wait to receive a loan invitation, combined with rigid requirements on how you can use the loan, may mean that Amazon seller lending is not the best option for your business.

If you need more flexible financing options, consider applying for a line of credit or business credit card.

Business Loan & Funding Products Review Methodology

Merchant Maverick has been researching and reviewing business lenders since 2015. Our writers have tested over a hundred different funding products, including traditional term loans, online loans, lines of credit, start-up loans, merchant cash advances, and equipment financing. In each review, we evaluate rates and fees, services, eligibility requirements, application process, sales and advertising transparency, customer service, and user reviews.

Read more about how we rate business loans and funding products.

When comparing different lenders and loan products, we consider many data points, including the ease and transparency of the application process, interest rates, repayment structure, sales ethics, time to funding, revenue and time in business qualifications, and credit score requirements. Our lists of the best funding products include only those we’ve deemed worthwhile from multiple vantage points, and often share qualities such as widespread accessibility across fifty states, low rates, flexible requirements, and competitive borrowing amounts.

We spend an average of 10-15 hours researching and updating each one of our lists, making sure the loans and funding products included meet our internal standards for quality and reputation.

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