Amazon is promoting a new line of credit to cash-strapped sellers, adding to the ways it helps sellers grow their businesses on Amazon through lending programs. In 2019, Amazon loaned more than $1 billion to more than 14,000 US-based businesses.
The Marcus Business Line of Credit was built specifically for US Amazon sellers in a partnership between Amazon Lending and Marcus by Goldman Sachs.
Amazon Lending is rolling out the program gradually – eligible sellers will begin receiving invitations to apply for the line of credit on June 10 via Seller Central.
In its announcement to sellers, Amazon wrote, “As with our direct loans from Amazon Lending, the goal is to help sellers grow their Amazon business, as well as other online or offline channels. For example, sellers can use funds to cover staffing and operations costs, buy more inventory for improved cost efficiency, invest in product development and manufacturing, or expand marketing efforts to build their brands and grow their customer base.”
Amazon launched a program to offer working capital loans to sellers 8 years ago. A service called Kabbage had innovated the use of automated data sources to underwrite online seller working capital loans (including marketplace and PayPal transaction history, customer traffic and reviews, seller ratings, and even social networking data) and others, like PayPal and Amazon, jumped on the bandwagon.
The coronavirus outbreak has highlighted the fragility of online sellers’ finances as many faced cash flow issues, and Amazon had temporarily paused repayment of all Amazon Lending loans for sellers in the US and UK in the early weeks of the pandemic.
CNBC said the new line of credit is the first instance of Amazon allowing a financial institution to make underwriting decisions for its sellers.
You can find the announcement on Amazon Seller Central.