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Amazon Seller Lending Program Guide

Ultimate guide to Amazon seller lending program.
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Becoming an Amazon seller can help you make money (even in the form of passive income). Using Amazon FBA, you can even select a good product and let the platform do the rest. This might seem like easy money, but remember that every business has its costs. Statistics show that only 48% of small businesses can manage their financial needs and others need funds and financingItit is likely that you will require some capital somewhere in the future. If you plan to apply for a loan to keep your retail business goingconsider lookingok into the Amazon Lending Program. This article is about this program, the how-tos, and some information you need to get a loan.

What is the Amazon Lending Program? 

Amazon describes its lending program as a facilitator for businesses. No business should have to be complicated. So the platform has designed financing solutions through the lending program. This program aims to help small and medium-sized businesses.

Simply put, these loans are short-term help offered to “qualified sellers.” This program was first launched back in 2011 when Amazon started seeing opportunities in the lending industry.

This Loan can start from 1000 dollars and rise to even 750000 dollars (which is pretty good for an online business on Amazon). Unlike banks that require serious taxing documents and will review your credit before loaning you a dime, Amazon only needs to ensure you have been a good seller on the platform and your customers have been relatively satisfied.

Why Should Sellers Use Amazon Lending? 

Bank systems take too long to approve you for a loan and might not be appropriate for your immediate needs. Here is why you should try the Amazon Seller Lending Program instead of a bank loan:

  • It’s quickly approved: based on the product you sell, the loan could take only a few days (1 to 5 business days).
  • It’s hassle-free: no need to provide credit score, financial profile, or tax information. All you need to do is check your eligibility, request an invite, and wait for the result. Amazon will go through your seller account and determine if you qualify. 
  • It gives you the option to manage inventory: you can buy bulk products and fill your inventory ahead of time by getting a loan.
  • It’s flexible: the Amazon Loan program provides sellers with more than one financing option (if you sell more than one product).
  • It has a low-interest rate: the maximum interest for an Amazon loan is 16% (for a 12-month term). This is great for business owners who want to work long-term and grow their sales.

Know More: How to Increase Sales on Amazon?


How to Get Funds from Amazon Lending?

Amazon considers this loan to help growing businesses, meaning you must be a seller on the platform to get approved in the Amazon Seller Lending Program. To start the process, you should sign up. But before signing up, there are some requirements you need to have to get approved (we will discuss them next). Amazon Lending Program works on an invite-only basis. This means that only some are allowed to apply for a loan.

What Are the Requirements for Getting a Loan from Amazon?

Amazon Loan amount can be anywhere between 1000 and 750000 dollars. The good news is unlike many bank loans; there is no need to fix your credit or manage taxes before applying. But you should meet these requirements:

  • A selling history of (at least) 12 months
  • Having sold at least 10000$ in the past year
  • Good customer satisfaction metrics (low return rates, positive reviews, etc.)
  • No serious customer complaints in the past six months
  • No serious copyright or trademark complaints and issues
  • Following the Amazon listing guides
Amazon loan requirements.

These are some of the things you should do to get a loan approved by the Amazon platform. The best way to ensure you are eligible for Amazon Loan Program is to follow the rules and try your best to avoid trouble right from the start. If you have a low return rate and customers have left positive reviews for your product, Amazon will know that you are a growing business and also serious in your practices, so it loans you more quickly and easily.

Eligible countries for this lending program are:

  • Canada
  • China
  • France
  • Germany
  • Italy
  • Spain
  • India
  • The United Kingdom
  • The US (except Panama Canal Zone, Virgin Islands, Vermont, Utah, Tennessee, South Dakota, Puerto Rico, and North Dakota)

Read More: How to Reduce Your Return Rate on Amazon?


How to Sign Up for Amazon Lending Program?

When your business’s financial survival depends on a certain amount of money, Amazon loans can be the first thing that comes to your mind. Although the process is pretty straightforward, it is essential to do it right and complete all the steps.

How to get started with Amazon lending program infographic.

Here is how:

  • First, log in to seller central and enter your account.
  • In seller central, click on “growth” then “lending.”
  • On the opened page, click on the “Amazon Lending” option. This option is only visible if you are an eligible seller for the program.
  • Select the amount and the term you would like on the opened page.
  • Follow the rest of the steps (as stated in the form) and submit your approval.
  • Approving a loan request usually takes up to five business days. After this, the funds should be deposited into your account.

You should be satisfied if you are not eligible for the Amazon Lending Program yet. You may become eligible later as you sell more and start working on your rank and return rates (and customer care). The platform will send you an invitation as soon as you meet all the conditions. 

Why Don’t Banks Loan Money to the Amazon Sellers?

Let’s remember: banking is an ancient practice (that still works), and the nature of some of its rules and regulations just can’t be aligned with modern businesses like Amazon FBA. Many banks in the US and Europe are still conservative, and the idea of FBA, online arbitrage, drop shipping, etc., is just outside their area of expertise. To lend you money, banks need to make sure you can pay it back no matter what. Although it seems unfair, a bank won’t give you (or your business) money unless you already have money. 

Many banks need help finding the right reason to ensure a small business owner on Amazon will make enough profits to pay them back. So they won’t give them loans. Also, many Amazon sellers can’t get along with repayment terms, agreements, and relatively high-interest rates bank-paid loans.

Final Thoughts

Amazon loans can be an excellent option for businesses that need urgent money to take care of their operations and fill their inventories. You can rely on this program even if you are a small business, and 1000 dollars can help you. Amazon cares a lot about its customers and will loan the businesses it is sure will finally benefit the buyers. So it’s best to keep an eye on your product rank, return rates, and seller status on the platform. Study the needs of your business and gather knowledge about the payback and conditions of the loan.

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