Amazon Lending: loans for Amazon Sellers

As well as being one of the most popular places to buy online, Amazon’s marketplace is a huge opportunity for those looking to grow their own business, with brand sales on Amazon growing more than 22% in 2023. And for ambitious business owners, having the right financing on hand can make all the difference. Amazon lending offers a range of finance options – but there is also a range of alternative financing options out there for online businesses.

Whether you’re an established Amazon seller or just getting started, understanding Amazon Lending can help you decide if it’s the right funding option for your business.

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What is Amazon Lending?

Amazon Lending is a term loan program designed specifically for Amazon sellers. It provides short-term loans that can help sellers finance inventory purchases, marketing efforts, and other business expenses. 

The program offers loans ranging from £500 to £2 million, making it accessible to both small and medium-sized businesses. One of the key benefits of Amazon Lending is the simplified application process that’s integrated with the Amazon platform itself, meaning that they already have much of the data they need to assess your business.

How does Amazon Lending work?

Amazon Lending offers two primary financing options for UK sellers:

1. Merchant Cash Advance (MCA): This provides a lump sum of cash that you can use for any business-related expenses. Unlike standard loans, repayments are set as a percentage of your future Amazon sales, allowing for flexible repayments that adjust with your cash flow. This can be particularly helpful if your sales fluctuate seasonally or month-to-month​.
2. Flexible Financing Line (FFL): If you’re not sure how much you need, this provides a pre-approved business line of credit that you can draw from as needed. It offers a flexible way to access funds for ongoing needs without incurring any costs until you use the available credit. Repayments are also tied to your Amazon sales, and there are no interest charges—only a one-time fixed fee​.

Who is eligible for Amazon Lending?

Eligibility for Amazon Lending depends on several factors, including your sales performance and account standing. Generally, Amazon extends loan offers to sellers who have demonstrated strong sales history and positive account health metrics, rather than you going to them to request.

1. Log in to Seller Central: Check if your business is eligible for Amazon Lending offers.
2. Review your options: If eligible, review the available loan products and terms.
3. Apply: Select the financing option that best suits your needs and complete the application without impacting your credit score​.

Benefits of Amazon Lending

• Quick access to funds: Eligible sellers can receive funds within one business day of approval, allowing for rapid response to business needs​.
• No hidden fees: Amazon Lending features straightforward repayment terms with no additional fees, making it easier to manage your financial commitments​.
• Sales-based repayments: Repayments adjust with your sales volume, offering a flexible way to manage your cash flow.

Drawbacks of Amazon Lending

• Limited availability: Amazon Lending is only available to select sellers based on invitation, which can restrict access for newer or lower-volume sellers​.
• Lack of transparency: The terms and conditions are not publicly disclosed, making it challenging to compare Amazon Lending with other financing options​.
• Fixed repayment rates: While the sales-based repayment model offers flexibility, the fixed rates can still be higher than other financing alternatives depending on your business's performance​.

Alternatives to Amazon Lending

If Amazon Lending isn’t the right fit or you’re ineligible, there are several alternative financing options that can be just as suitable for Amazon sellers:

1. Small business loans

iwoca provides unsecured business loans tailored to the needs of online businesses. Flexi-Loans are designed to offer rapid access to funds, without the need for long applications or assets as security.

• Borrow between £1,000 and £1,000,000 for everything from short-term cash flow needs to larger investments in growth.

• Choose a term that suits you, from 1 day to 60 months, with no early repayment fees.
• Get approved in a few hours, with funds deposited into your account as quickly as the same day.

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2. Inventory finance

If you’re looking to stock up on new products, or raise money on the back of unsold stock, then inventory finance is the one for you. It provides businesses with the capital needed to purchase stock by using existing or purchased products themselves as security. 

• This type of financing is ideal for businesses that need to maintain high inventory levels, especially during peak seasons or when expanding product lines. 
• You can access the funds to keep your shelves stocked, take advantage of bulk purchasing discounts, or manage seasonal demand, without needing to wait for free cash flow.

3. Invoice financing

Invoice financing allows businesses to unlock cash tied up in unpaid invoices, providing a quick injection of working capital. 

• This option is particularly beneficial for businesses that sell wholesale to Amazon or other retailers, as it helps bridge the gap between invoicing and payment. 
• With invoice financing, you can access up to 90% of the invoice value almost immediately, which can significantly improve cash flow, allowing you to reinvest in your operations, pay suppliers on time, or take on new opportunities without waiting for your customers to settle their accounts.

Choosing the Right Financing for Your Amazon Business

Amazon Lending offers a convenient and quick way for eligible Amazon sellers to access funding, with options designed to align with the needs of e-commerce businesses. However, the specific availability means it might not always be an option for everyone. For UK-based Amazon sellers looking for a versatile and hassle-free financing option, iwoca’s Flexi-Loan have helped over 90,000 businesses access the capital they need to grow.

• Simple applications: Link your bank account and get going in minutes.
• Fast funding: Once you’re approved, we’ll send the money straight to your account.

Flexible repayment terms: Pay interest only on what you draw down, and repay early with no extra fees.