Deal with Bank of America Merrill Lynch to reinvigorate Amazon Lending

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After a sluggish year of growth in 2017, a fresh deal seeks to breathe a new lease of life into the Amazon Lending scheme. Amazon Lending is the invitation only scheme that offers credit to merchants selling on the marketplace with rates and credit levels based on their marketplace sales performance.

The total lent in 2017 grew only slightly over the course of the year having almost doubled in 2016. And now Amazon has partnered with the Bank of America Merrill Lynch to provide loans to merchants in the same manner but whilst minimising the company’s exposure to the credit risk.

Amazon Lending makes loans of $1,000 to $750,000 in the US (the service is also available in the UK and Europe), with loan terms of up to a year, for companies that often find it hard to find lines of credit elsewhere. In June 2017, Amazon said it had made loans of more than $1 billion during the previous 12-month period. That showed great growth because total combined loans were $1.5 billion for the four years prior to that.

But growth in lending slowed in 2017. Having lent $661 million in 2016, last year they offered $692 million to Amazon merchants. But why the slowdown? There are several possible reasons.

Firstly, being a large lender brings with it risks and Amazon isn’t necessarily well equipped to shoulder those challenges. A bank, with greater expertise, is probably better placed. And even Amazon has finite resources at its disposal, so capital may well be better directed at other expansion plans.

And, as some sellers on Tamebay have previously pointed out, whilst any new line of credit is welcome and sometimes hard to come by, Amazon Lending didn’t always offer the best terms with interest rates typically clocking in at 6 – 14% depending your standing as a merchant.

Amazon has largely remained tight lipped about Amazon Lending and doesn’t even have a landing page about the scheme. Rather merchants see what they can borrow in the Seller Central console. But this deal does suggest they want to keep it going and, perhaps, make more loans.

Have you ever used Amazon Lending and what was your experience?

5 Responses

  1. I’ve been offered significant sums by Amazon Lending over the last two years but the risk appears too great to me. Typically the repayment period offered is 9 months. Amazon’s support when there are account-level issues are incredibly poor – in fact by all accounts it has gotten worse over the years.

    Could you imagine borrowing say 50K over 9 months and then Amazon suspends your account and then make little or no effort to help reinstate your account. Just last last week I was reading the case of someone having to pay back all the money when their account was suspended due to false claims by a competitor.

    Amazon certainly needs to sort out their support for merchants, particularly account-level support. The department responsible seems to be a law onto themselves, providing standard replies to keep their response statistics acceptable.

  2. Bob,
    My biggest reason for not utilizing Amazon Funding or PayPal Advances is the short payback terms. If some kind of rollover to a longer term of payback could be automatically available, if sales slowed, were interrupted or other business matters came up. it would be less of a risk to our business.

  3. I’ve used it multiple ties just to play the Amazon game and to see if it would affect my sales. Payment terms are horrible along with the rates. I have great credit as does my business. I believe my rate was 15.9% every time and my terms were 3-6 months. My guess is they took a hit in lending as company’s like American Express are jumping in on funding these types of loans. I received an offer from AE a couple months ago no interest 90 day repayment and the 2% funding fee waved. My guess that deals like that and their god awful rates put a dent in their lending.


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