Amazon Lending is an invitation-only short-term business loan that helps Amazon sellers fund inventory purchases, but it’s not available to everyone. For those who do not have access to Amazon Lending, there are other options. We reviewed Amazon Lending and the top alternatives to help fund your business inventory and working capital needs.
Amazon Lending & Top Alternative Options
| Funding Option | Best For |
|---|---|
Invitation-only loans for established Amazon sellers needing to fund Amazon inventory purchases. | |
A line of credit for business owners to finance their Amazon purchases | |
Advances for ecommerce sellers who want to receive their sale proceeds faster | |
Invoice factoring or line of credit for businesses that sell on platforms beyond Amazon | |
Line of credit financing for businesses with minimal qualification requirements |
How We Evaluated Amazon Lending & Alternative Options
- Costs: How much the funding you are getting will cost you is often a determining factor with financing, whether the costs are in the form of interest rates, discount rates, or fees.
- Repayment terms: The type of financing that you want may be determined by the length of time you need to repay the funds.
- Eligibility criteria: If you are strictly a marketplace seller, you may be limited in the type of financing that you can acquire. Businesses extending beyond ecommerce have additional opportunities if they meet credit and revenue requirements.
After finding a financing product you are eligible for, make sure you understand all of the costs associated with that type of financing and how it compares to other financing options. Also, consider how long you have to repay the borrowed funds and whether the payment frequency is daily, weekly, or monthly. While merchant financing is usually more accessible to small business owners, it also has high costs and short repayment terms.
Amazon Lending for Inventory Financing
Amazon offers an inventory loan option to select Amazon sellers. Unfortunately, Amazon loans are by invitation only and not available to all sellers. Amazon loans range in amount from $1,000 to $800,000, but the loan amount is predetermined at the time you receive the invitational offer. Interest rates range from 6% to 13%, with terms up to six months.
How Amazon Lending Works
Amazon invites established sellers to participate for the express purpose of purchasing more inventory to sell on Amazon. Amazon prequalifies sellers based on sales volume and other data they track.
You’ll know you’re invited if you receive an Amazon Lending offer via Seller Central or email, like this:
Image source: SecondHalfDreams blog
As shown above, the Amazon Lending invitation contains a maximum loan offer and a range of repayment terms from which you can choose. You can accept all, or part, of the offered amount and choose the terms. The calculator determines the interest based on the terms you choose so that you’ll know exactly what the loan will cost. Amazon deposits funds into your bank account, usually within one to two days, which you can then use to purchase more Amazon inventory.
After funding, Amazon deducts a set monthly payment automatically from your Amazon payouts until the loan is repaid. The payment amount is also shown on your offer so that there are no surprises. Amazon Lending is for short-term funding, so payment terms are six months or less. If your sales numbers met Amazon’s expectations, you’ll likely receive more loan offers during and after the term of your loan.
Who Amazon Lending Is Right For
To be eligible for Amazon Lending, you must be an established Amazon seller. Only established sellers can qualify for an Amazon loan, and Amazon determines your eligibility. If you receive an invitation, and you need to finance additional inventory to sell on Amazon, Amazon Lending is a simple and fast way to get short-term funding.
Amazon Lending Costs
The interest rate on your Amazon loan is set based on the parameters that you chose when you accepted your offer. Most Amazon Lending loans are based on a 6% to 13% annual percentage rate (APR), but some high volume sellers report rate offers as low as 2% to 3% APR. There are no closing fees with Amazon Lending.
If your Amazon sales payout won’t cover the automatic payment, Amazon deducts the outstanding amount via automated clearing house (ACH) from your bank account. If you can’t pay back the loan within the term you agreed upon, Amazon will ultimately seize your Fulfillment By Amazon (FBA) inventory as payment and sell it to settle the debt. Amazon primarily targets FBA sellers with Amazon Lending offers because your FBA inventory acts as collateral.
How to Get Amazon Lending
Amazon offers these loans periodically to Amazon sellers based on their sales histories, their inventory levels, how well they maintain their inventory, and their Amazon customer service performance metrics. If you receive an Amazon Lending offer, you have three options: decline the offer, accept the offer, or accept only part of the offer.
Amazon Corporate Line of Credit: An Alternative Amazon Loan
If you primarily purchase inventory from other Amazon sellers, Amazon offers two corporate line of credit options: a revolving credit line of up to $100,000 at 12.99% APR with monthly payments, and a pay-in-full line of credit that defers payment on your purchases for up to 55 days. Amazon sellers and businesses that purchase through Amazon may find these credit lines beneficial.
Amazon Corporate Line of Credit at a Glance
| Revolving Line of Credit | Pay-in-Full Line of Credit | |
|---|---|---|
| Loan Amount | Up to $100,000 | Up to $100,000 |
| Costs | 12.99% APR | No fees or interest |
| Repayment Terms | Up to 12 months, or pay in full | Pay in full within 55 days |
| Minimum Credit Score | 600 | 600 |
| Amazon Account History | Positive performance history | Positive performance history |
How an Amazon Line of Credit Works
Like a credit card, with a line of credit, you are issued an amount of credit that you can borrow. As the amount borrowed is paid back, it comes available for you to borrow again. Amazon offers two different line of credit options for Amazon sellers: a revolving credit line and a pay-in-full credit line.
The revolving line of credit is aimed at small to medium-sized businesses (SMBs) while the pay-in-full line of credit is geared toward larger businesses. For either option, you can apply online through Amazon.
Amazon Line of Credit Costs
The costs associated with an Amazon Corporate Line of Credit vary depending on which option you choose. For those that choose the revolving line of credit, there is a 12.99% APR on the funds you use from the line of credit. For businesses that opt for the pay-in-full line of credit, there are no fees associated with this financing method. It merely allows you to defer payment for up to 55 days.
Amazon Revolving Line of Credit Costs
Amazon Revolving Line of Credit Costs | |
|---|---|
Expected APR | 12.99% |
Additional fees | None |
Amazon Pay-in-Full Line of Credit Costs
Amazon Pay-in-Full Line of Credit Costs | |
|---|---|
Expected APR | 0.00% |
Additional fees | None |
Amazon Line of Credit Terms & Qualifications
Amazon doesn’t share the metrics it uses to evaluate your creditworthiness for either of its line of credit options. However, some reviewers of these financing tools complain that the initial credit line they were offered was minimal despite having positive performance metrics with Amazon.
Amazon Line of Credit Qualifications | |
|---|---|
Credit score | At least 600 |
Performance history | Must be in good standing with Amazon and have a positive performance history |
Amazon businesses in good standing with solid credit scores may benefit from these financing options offered directly from Amazon. Unlike Amazon Lending, which is by invitation-only, Amazon lines of credit are available to all approved Amazon sellers.
Amazon Revolving Line of Credit Terms
Amazon Revolving Line of Credit Terms | |
|---|---|
Loan amount | Up to $100,000 |
Repayment term | Up to 12 months |
Amazon Pay-in-Full Line of Credit Terms
Amazon Pay-in-Full Line of Credit Terms | |
|---|---|
Loan amount | Up to $100,000 |
Repayment term | Within 55 days |
How to Get an Amazon Line of Credit
You can get an Amazon Line of Credit of up to $100,000 by applying online. The Revolving Credit Line has an APR of 12.99%, and there are no interest charges on the Pay-In-Full credit line, which allows you to defer payments for up to 55 days.
Payability: An Alternative for Ecommerce Sellers
Payability offers two financing options for ecommerce businesses. Payability Instant Access provides your business with daily payments on your ecommerce sales so that you don’t have to wait for the standard payout dates. Payability Instant Advance provides a cash advance on your future ecommerce sales. Both options are available to sellers on multiple ecommerce platforms.
How Payability Works
Payability utilizes your Amazon sales―or sales from various ecommerce platforms―as security for the funds it lends you. For that reason, the amount you receive is based on your prior sales performance. Payability reviews your sales performance metrics to determine how much you are eligible for and what your cost of capital will be.
Payability Instant Access deposits your Amazon sales income into your bank account daily. This process is called factoring, and it’s quite simple. Payability deposits 80% of your daily Amazon revenues into your account or onto its prepaid MasterCard while 20% is held in reserve to cover returns or chargebacks and is released on Amazon’s regular payment schedule.
Payability Instant Advance provides you with a cash advance of up to $250,000 on your future Amazon sales. Payability charges a fixed weekly fee and assumes a repayment term of 20 weeks. If you pay the advance back sooner than the 20 weeks, Payability rebates the collected fee amount for the additional weeks for which you were charged.
Payability Costs
| Products | ||
|---|---|---|
| Instant Access | ||
| Instant Advance |
Payability Repayment Terms & Qualifications
To qualify for financing through Payability, you will need to have at least $2,000 in monthly ecommerce sales, a sales history of at least 90 days, and positive performance metrics in the marketplace in which you are operating. If you qualify for an Instant Advance, you will have up to 20 weeks to repay the advance.
Payability Instant Access Terms & Qualifications
Payability Instant Access Terms & Qualifications | |
|---|---|
Monthly revenue | $2,000 per month in ecommerce sales |
Time in business | 90 days of ecommerce sales history |
Performance history | Payability will review your performance metrics for the marketplace site that you sell on (e.g., Amazon, Etsy) |
Payability Instant Advance Terms & Qualifications
Payability Instant Advance Terms & Qualifications | |
|---|---|
Loan amount | Up to $250,000 |
Repayment term | 20 weeks |
Time in business | At least eight months of ecommerce sales history |
Minimum monthly revenue | $7,500 |
How to Get Funding From Payability
If you are an active marketplace seller and wish to receive your earnings faster than Amazon, consider applying for Instant Access with Payability. If you are looking for an advance of your earnings of up to $250,000, and have at least eight months of ecommerce history, you can apply for Payability’s Instant Advance. You can receive approval within 24 hours of connecting your ecommerce accounts to Payability.
BlueVine: Invoice Factoring or a Line of Credit
BlueVine offers the flexibility of providing financing either through invoice factoring or through a line of credit. This is an advantage over many other lenders on our list that only provide one form of financing—the exception being OnDeck, which offers both a short-term loan and line of credit.
If your business has current customer invoices that are due within 90 days and you would like to receive the funds faster, invoice factoring can provide you with those payments. BlueVine offers up to $5 million with discount rates as low as 0.25% per week.
Additionally, BlueVine offers a small business line of credit of up to $250,000 with APRs ranging from 18% to 86% and repayment terms of either six or 12 months.
How Financing With BlueVine Works
Invoice factoring with BlueVine allows you to be paid, upfront, for a portion of your unpaid invoices. BlueVine will pay you up to 90% of the value of your invoice and then pay you the rest minus its fees after your customer pays the invoice in full. In most cases, your customers will make their payments directly to the factoring company.
A line of credit allows you to draw funds against your credit limit, with the funds becoming available to you again as you repay them. One significant advantage of a line of credit is that you only pay interest on the amount of funds you have drawn rather on the entire amount available to you.
Invoice Factoring & Line of Credit With BlueVine Costs
The costs of invoice factoring with BlueVine depends on the number of invoices you factor and how quickly your customers pay their invoices. You are charged a discount rate―the amount the invoice factoring company retains of the factored invoice after your customer pays―starting at 0.25% per week.
Invoice Factoring With BlueVine Costs
BlueVine Invoice Factoring | |
|---|---|
Discount Rate | 0.25% to 1.35% per week |
Expected APR | 13% to 70% |
Origination Fee | None |
Line of Credit With BlueVine Costs
BlueVine Line of Credit | |
|---|---|
Starting Interest Rate | 4.8% |
Expected APR | 15% to 78% |
Maintenance Fee | None |
BlueVine Repayment Terms & Qualifications
BlueVine requires a minimum credit score of 530 and at least three months of invoicing history to qualify for invoice factoring. Qualification requirements are more stringent for a line of credit through BlueVine, requiring a credit score of at least 600 and at least six months of business operations.
BlueVine Invoice Factoring Terms
BlueVine Invoice Factoring | |
|---|---|
Funding Amount | $5,000 to $5 million |
Advance Rate | 85% to 90% |
Repayment Term | Paid with invoice collection |
Personal Guarantee | Required |
Funding Speed | One business day |
BlueVine Invoice Factoring Qualifications
BlueVine Invoice Factoring | |
|---|---|
Minimum Credit Score | 530 |
Minimum Time in Business | Three months |
Minimum Annual Revenue | $100,000 |
BlueVine Line of Credit Terms
BlueVine Line of Credit | |
|---|---|
Credit Line | Up to $250,000 |
Repayment Term | Six or 12 months |
Repayment Schedule | Weekly or monthly |
Collateral | Blanket Uniform Commercial Code (UCC) filing |
Personal Guarantee | Required |
Funding Speed | Same business day |
BlueVine Line of Credit Qualifications
BlueVine Line of Credit | |
|---|---|
Minimum Credit Score | 600 |
Minimum Time in Business | Six months |
Minimum Annual Revenue | $100,000 |
How to Get Started With Invoice Factoring From BlueVine
You can apply for invoice factoring with BlueVine in amounts ranging from $5,000 to $5 million in 10 minutes or less via its online application. Once approved, you can get funded as soon as the next day. The total time from the start of your application to funding is typically one to three days.
Fundbox: Line of Credit
Another option for small business owners is a line of credit from Fundbox with minimal requirements and an early repayment discount. Fundbox can provide funding up to $100,000, with rates as low as 4.66% per month and repayment terms of 12 or 24 weeks.
How Lines of Credit With Fundbox Work
A Fundbox line of credit offers up to $100,000 in funding to small business owners. It has repayment terms of 12 or 24 weeks, which the borrower can select when making a draw. Each payment has a weekly fee, and Fundbox does not charge interest on payments made early, providing small business owners with an opportunity to save money.
Line of Credit With Fundbox Costs
Fundbox Line of Credit | |
|---|---|
Starting Interest Rate | 4.66% |
Expected APR | 10% to 79% |
Maintenance Fee | None |
Fundbox Repayment Terms
Fundbox Line of Credit | |
|---|---|
Credit Line | Up to $100,000 |
Repayment Term | 12 or 24 weeks |
Repayment Schedule | Weekly |
Collateral | Blanket UCC filing |
Personal Guarantee | Required |
Funding Speed | One business day |
Fundbox Qualifications
Fundbox Line of Credit | |
|---|---|
Minimum Credit Score | 500 |
Minimum Time in Business | Three months |
Minimum Annual Revenue | $50,000 |
How to Get Started With Invoice Financing From Fundbox
You can apply for invoice financing, in amounts ranging from $1,000 to $100,000, with Fundbox through its online application in less than 10 minutes. Once you connect Fundbox to your bank accounts or accounting software, you can be approved the same day and funded within 24 hours.
Bottom Line
Amazon Lending is a highly competitive inventory financing option for Amazon sellers. Unfortunately for startups and struggling sellers, Amazon only invites the success stories to the Amazon Lending party. Until you gain their attention, you’re on your own when it comes to financing your inventory purchases.
Due to its ability to provide both invoice factoring and lines of credit, BlueVine offers financing options for small business owners looking for immediate working capital. With minimum qualification requirements and competitive pricing, BlueVine offers financing solutions for most small businesses.
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