Amazon Offers Merchant Financing For Online Retailers

Online Merchant has launched a new program called Amazon Lending offering loans to online sellers. Although the program has not been announced publicly, retailers in Amazon’s marketplace have reportedly received e-mails with offers for financing from Amazon Capital Services, Inc., a new division of the company.

The new merchant financing program targets online sellers  who do not have enough up-front cash to purchase inventory to be sold on Amazon’s marketplace. Amazon Lending provides loans to participating sellers and collects repayment by taking a portion of their sales revenues.

Amazon is pre-qualifying certain marketplace sellers based on their sales, and is reportedly lending up to $800,000 to some merchants. Funds can be used to purchase additional inventory. Payments are automatically deducted from merchants’ accounts on a monthly basis.

Like other funding providers, including direct lenders like Horizon, Amazon is stepping in to fill the demand for loans left by banks that have curtailed lending in the years following the financial crisis. By increasing the availability of financing, Amazon hopes to drive more sales while also collecting interest on the loans it issues.

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