Amazon Lending & 8 Alternative Funding Options for Your Business

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’ve reviewed Amazon Lending and eight of the top alternatives to help fund your business inventory and working capital needs.

Here’s what to expect from Amazon Lending and eight alternatives to consider:

Amazon Lending & 8 Top Alternative Options

How We Evaluated Amazon Lending & Alternative Options

To determine which alternative lending options may be best in place of Amazon Lending we compared them based on a number of factors. We took into consideration the costs associated with each financing option, the repayment terms that are available, what it takes to qualify for each type of funding, and how easily you can access the funds.

Some of the factors you should think about when considering Amazon Lending and alternatives are:

• Costs: It’s important to know how much the funding you are getting will cost you, whether the fees 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. Some financing options have very short terms and need to be repaid within weeks, while others have terms that extend up to three years.
• Eligibility criteria: If you are strictly an Amazon or marketplace seller you may be limited in the type of financing that you are able to acquire. If your business extends beyond ecommerce marketplaces there are other opportunities available to you if you meet the credit score and annual revenue requirements.

After finding a financing product you are eligible for, it’s important to be sure that you understand all of the costs associated with that type of financing, and how it compares to other financing options. Also, take into consideration how long you have to repay the borrowed funds, and whether the payment frequency is daily, weekly, or monthly.

The key information you need to know about Amazon Lending and the top eight Amazon Lending alternatives are:

1. 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 that you receive the invitational offer. Interest rates range from 6% to 13%, with terms up to six months.

Amazon Lending At-a-Glance

How Amazon Lending for Inventory Works

You can’t apply for Amazon Lending; it’s invitation-only. Amazon invites established sellers to participate for the express purpose of purchasing more inventory to sell on Amazon. Amazon pre-qualifies you 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 for you to choose from. 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 you’ll know exactly what the loan will cost. Amazon deposits funds into your bank account, usually within 1-2 days, which you can then use to purchase more Amazon inventory.

After funding, Amazon automatically deducts a set payment from your Amazon payouts until the loan is repaid. The payment amount is also shown on your offer so 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 for Inventory 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 for Inventory 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% – 13% 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 will deduct the outstanding amount via 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.

Amazon Lending for Inventory Limitations

Amazon is very clear that Amazon Lending funds can only be used to purchase inventory to sell on Amazon. The loan can’t be used for other business expenses, or for inventory that’s being sold in a retail space. If you accept the loan, and Amazon doesn’t see inventory added to your account, it can call in the loan for breaking the agreement.

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: You can decline the offer, accept the offer, or accept only part of the offer.

2. 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

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, while the pay-in-full line of credit is geared toward larger businesses. For either option, you can apply online through Amazon.

Who an Amazon Line of Credit Is Right For

If your business makes a lot of purchases on Amazon, you may benefit from one of Amazon’s line of credit options. For smaller businesses, the revolving line of credit, with its 12.99% APR, provides interest rates that could be less than your business credit card. For larger businesses, the pay-in-full line of credit provides some flexibility in when you pay for your purchases, and may be a good option if your income stream varies from week to week.

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 that 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

The costs associated with the revolving line of credit from Amazon are:

• Expected APR: 12.99%
• Additional fees: None

The expected APR for an Amazon revolving line of credit is lower than many of the other financing options on our list, like Kabbage with APRs starting as high as 30%. However, Amazon’s pay-in-full line of credit is even more affordable having no interest fees at all.

Amazon Pay-in-Full Line of Credit Costs

The costs associated with the pay-in-full line of credit from Amazon are:

• Expected APR: 0.00%
• Additional fees: None

If you actively purchase inventory from Amazon, this can be a great financing option for you, as it allows you to make purchases and defer payments for up to 55 days. It is the only financing option on our list that has no additional costs associated with it.

Amazon Line of Credit Terms and Qualifications

Amazon doesn’t share the metrics they use to evaluate your creditworthiness for either of its line of credit options. Some reviewers of the products complain that the initial credit line that they were offered was minimal despite having positive performance metrics with Amazon.

You can likely assume that in the very least, Amazon will have the following qualification requirements:

• 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 Amazons sellers.

Amazon Revolving Line of Credit Terms

The standard terms for an Amazon revolving corporate line of credit are:

• Loan amount: Up to $100,000
• Repayment term: Up to 12 months

Amazon revolving lines of credit are available in amounts up to $100,000. While this is equal to the maximum loan amount offered by Fundbox, it is lower than many of the other financing options on our list. Loan Builder, for example has a maximum loan amount of $500,000.

Amazon Pay-in-Full Line of Credit Terms

The standard terms for an Amazon pay-in-full line of credit are:

• Loan amount: Up to $100,000
• Repayment term: Within 55 days

While the maximum loan amount of $100,000 is less than the maximum loan amount offered by many of the lenders on our list, the repayment period of 55 days is also comparatively short. If you are uncertain that you will be able to repay your line of credit in 55 days, you may be better served by a line of credit from another provider, like BlueVine.

Amazon Line of Credit Limitations

The amount of the line of credit you are offered is based on your annual revenues, and the line of credit amounts offered are generally smaller than you might get from another line of credit funder. Additionally, funds from Amazon’s Corporate Line of Credit can only be used for purchases on Amazon, limiting your purchasing power. If you are looking for a more flexible financing option, a line of credit from BlueVine does not limit you to only purchasing from Amazon.

How to Get an Amazon Line of Credit

You can get an Amazon Line of Credit of up to $100,000 by applying on 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.

Visit Amazon

3. Payability for eCommerce Sellers: An Alternative to Amazon Lending

Payability offers two financing options for ecommerce businesses. Payability Instant Access provides your business with daily payments on your ecommerce sales (so you don’t have to wait for the standard payout dates), and Payability Instant Advance provides a cash advance on your future ecommerce sales. Both options are available to sellers on multiple ecommerce platforms.

Payability At-a-Glance

How Payability Works

Payability utilizes your Amazon sales (or various other selling platforms) as security for the funds it lends you. The amount you are able to receive is based on your prior sales performance. Payability will review 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; 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 that you were charged for.

Who Payability Is Right For

Any seller that wants to control their cash flow and not wait for Amazon’s 14-day payouts will appreciate Payability. Sellers who need to move fast on inventory buys, or that need to cover due-on-receipt payments throughout the month can benefit from Payability’s daily deposits. Those that need upfront working capital, may see greater benefit from Payability’s instant advance product, wherein they can receive a lump sum cash advance.

Payability Costs

Payability’s 1% to 2% Instant Access fee and the 0.5% to 1% Instant Advance fee are based on your total Amazon sales, but that’s all you pay. Payability has no startup or cancellation fees, and there’s no loan to repay. Payability simply advances you your own Amazon income faster than Amazon pays it out.

Payability also gives you an option to have your deposits placed on a prepaid MasterCard that pays 2% cash back on purchases. Going this route offsets much of Payability’s 2% fee.

Payability’s Instant Access financing is one of the more cost effective ways of receiving proceeds from your Amazon sales. Because Payability will receive repayment directly from your Amazon payout there is lower risk, which translates to a lower repayment cost for you. At a maximum APR of 24%, the cost of Payability Instant advance caps out lower than some of the providers minimum APR.

Payability Repayment Terms & Qualifications

To qualify for financing through Payability, you will need to have $2,000+ in monthly ecommerce sales, a 90 sales history, 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

The standard qualification requirements that you can expect with instant access through Payability are:

• 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)

Unlike BlueVine and other providers, Payability does not use your annual revenues to determine your eligibility, instead it simply requires that your business has had monthly revenues of at least $2,000 in ecommerce sales over the past three months.

Payability Instant Advance Terms & Qualifications

The standard loan terms and qualification requirements that you can expect with an instant advance from Payability are:

• Loan amount: Up to $250,000
• Repayment term: 20 weeks
• Time in business: At least eight months of ecommerce sales history
• Monthly revenue: $7,500

With loan amounts of up to $250,000, Payability’s Instant Advance has a higher lending potential than either of Amazon’s line of credit options. However, the minimum monthly revenue requirements of $7,500 are higher than some of the other providers, like LoanBuilder that only requires you to have $42,000 in annual revenues (which equates to $3,500 in monthly revenues).

Payability Limitations

Payability is only available to marketplace sellers, and is only based on your ecommerce sales. If you operate a brick and mortar business, or sell on platforms that are not supported by Payability, you’ll likely need to seek an alternative source of financing, like a short-term loan from OnDeck, or invoice factoring with BlueVine.

How to Get Funding From Payability

If you are an active marketplace seller, and wish to receive your earnings faster than Amazon, you may 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.

Visit Payability

4. BlueVine for Invoice Factoring & Line of Credit: An Amazon Lending Alternative

BlueVine offers the flexibility of providing financing either through invoice factoring, or through a line of credit. This is an advantage over many of the other lenders on our list that only provide one form of financing, the exception being OnDeck which offers both a short-term loan and a 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 also 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.

Financing From BlueVine At-a-Glance

How Financing With BlueVine Works

Invoice factoring with BlueVine allows you to be paid, up front, 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 has paid the invoice in full. With invoice factoring, your customers will make their payments directly to the factoring company in most cases.

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 that you have drawn rather on the entire amount available to you.

Who Financing With BlueVine Is Right For

Invoice factoring from Bluevine is a good financing option for businesses that, in addition to selling on Amazon, have customers that they invoice for payment and who would like to outsource their accounts receivable functions. Businesses that need quick access to funds for working capital or other small business needs, may benefit from the use of invoice financing.

Invoice Factoring and Line of Credit With BlueVine Costs

The costs of invoice factoring with BlueVine depends on the amount of invoices that you factor, and how quickly your customers pay their invoices. You are charged a discount rate (the amount that the invoice factoring company retains of the invoice that you factored after your customer pays) starting at 0.25% per week.

Invoice Factoring With BlueVine Costs

The typical costs associated with invoice factoring with BlueVine are:

• Discount rate: Starting at 0.25% per week
• Expected APR: 13% to 70%
• Origination fee: None

Line of Credit With BlueVine Costs

The typical costs associated with a line of credit with BlueVine are:

• Interest rate: Starting at 0.8% per week
• Expected APR: 18% to 82%
• Origination fees: None

The costs associated with both BlueVine’s invoice factoring and line of credit options are in line with the other financing options on our list, and closely match those of Fundbox and OnDeck who offer similar financing products.

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.

Invoice Factoring With BlueVine Terms & Qualifications

To qualify for invoice factoring from BlueVine you will need to have a credit score of at least 530, been in business for at least three months, and have current invoices that are due within 90 days. If qualified, you can receive up to $5 million with BlueVine advancing up to 90% of the factored invoices.

The basic terms and qualifications that you can expect with invoice factoring from BlueVine are:

• Loan amount: $5,000 to $5 million
• Advance rate: 85% to 90% of invoices factored
• Repayment term: Advances are repaid as customers pay their invoices
• Credit score: At least 530 (check your score for free)
• Outstanding invoices: Invoices due within 90 days
• Time in business: At least three months of invoicing history

In terms of lenders on our list that provide accounts receivable financing, BlueVine’s time in business requirement of three months is more lenient than Fundbox which requires six months of business operations. However, Fundbox has no minimum credit score requirement, while BlueVine requires a minimum credit score of 530.

Line of Credit With BlueVine Terms and Qualifications

Borrowers with credit scores of at least 600, six months of business operations, and annual revenues of at least $100,000 can qualify for a line of credit from BlueVine. Repayment terms are either six or 12 months with weekly or monthly payments.

The basic terms and qualifications that you can expect with a line of credit from BlueVine are:

• Line of credit amount: Up to $250,000
• Repayment term: Six or 12 months
• Repayment schedule: Weekly or monthly
• Credit score: At least 600 (check your score for free)
• Time in business: Six months or more
• Annual revenue: At least $100,000

With loan amounts of up to $5 million with invoice factoring, BlueVine has the largest maximum loan amount of any of the providers on our list. The next highest maximum loan amounts are from LoanBuilder and OnDeck who both offer short-term loans with maximum loan amounts of up to $500,000.

Invoice Factoring With BlueVine Limitations

In order to be eligible for invoice factoring with BlueVine you need to have outstanding customer invoices. If your business is solely selling on Amazon, then invoice factoring may not be the right option for you; however, if you also have invoiced customers, you can receive very fast access to the value of your invoices before your customers paying you.

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. When 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.

Visit BlueVine

5. Fundbox for Invoice Financing: An Alternative to Amazon Loans

Another option that utilizes your outstanding invoices is invoice financing, wherein the lender advances you up to 100% of the invoice amount, which is repaid as your customers pay. 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.

Invoice Financing At-a-Glance

How Invoice Financing With Fundbox Works

Invoice financing with Fundbox is similar to invoice factoring, in that the amount of financing that you can receive is dependent on the amount of your outstanding invoices (due within 90 days). Fundbox advances you the amount (or a percentage) of the outstanding invoice upfront, and you repay the advance as the invoice is paid by your customer. In exchange, you are charged a percentage fee (starting at 4.66% per month) for the upfront use of the funds.

Who Invoice Financing With Fundbox Is Right For

Invoice financing with Fundbox is a good financing option for businesses that, in addition to selling on Amazon, have customers that they invoice for payment. Businesses that need quick access to funds for working capital or other small business needs, may benefit from the use of invoice financing.

Invoice Financing With Fundbox Costs

With invoice financing through Fundbox you can expect to pay a discount fee starting at 4.66% on the value of the invoice(s) that you have financed. This is the fee that Fundbox charges you for allowing you access to your accounts receivable funds that you have not yet received from your customer(s).

The rates and fees that you can expect with invoice financing through Fundbox are:

• Discount rate: 1.7% to 5% per month
• Expected APR: 10% to 79%
• Origination fee: None

Despite the seemingly low monthly discount rate, the expected APR for invoice financing with Fundbox is in line with the APRs of many of the other providers on our list, including BlueVine who offers invoice factoring with an APR range of 13% to 70%.

Fundbox Repayment Terms & Qualifications

Fundbox can advance up to $100,000 of your outstanding invoices, with repayment terms of 12 to 24 weeks through weekly repayments. Fundbox has no minimum credit score requirement (though they do review your credit report), and requires that your business has been operational for at least six months.

The terms and qualifications that you can expect with invoice financing through Fundbox are:

• Loan amount: $1,000 to $100,000
• Advance rate: Up to 100%
• Repayment term: 12 to 24 weeks
• Repayment schedule: Weekly repayment
• Credit score: No minimum requirement
• Time in business: At least six months

Fundbox’s maximum loan amount of $100,000 is well below the $5 million available through invoice factoring with BlueVine. However, Fundbox has the advantage in that it has no minimum credit score requirement to qualify.

Invoice Financing With Fundbox Limitations

In order to be eligible for invoice financing you need to have outstanding customer invoices. If your business is solely selling on Amazon, then invoice financing may not be the right option for you. However, if you also have invoiced customers, you can receive very fast access to the value of your invoices before your customers paying you. Businesses that only sell on a marketplace platform may prefer Payability Instant Advance to receive an advance on marketplace receivables.

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’ve connected Fundbox to your bank accounts or accounting software, you can be approved the same day and funded within 24 hours.

Visit Fundbox

6. LoanBuilder for a Short-Term Business Loan: An Alternative to Amazon Loans

LoanBuilder offers short-term loans ranging from $5,000 to $500,000 with repayment terms of 13 to 52 weeks. If you have a credit score of at least 550, at least $42,000 in annual revenues, and at least nine months of business operations, you may qualify for a short-term loan through LoanBuilder. Interest rates range from 6.49% to 19.31%.

Short-Term Business Loan At-a-Glance

How a Short-Term Loan With LoanBuilder Works

Short-term business loans with LoanBuilder differ from a line of credit in a few ways. Once a short-term loan is funded, you begin paying interest on the full amount of the loan immediately, even if the funds sit unused in your bank account. Short-term loans with LoanBuilder have a set repayment term of 13 to 52 weeks.

Who a Short-Term Loan With LoanBuilder is Right For

If your business has financing needs that go beyond purchasing items from Amazon, or increasing your Amazon inventory, you may want to consider applying for a short-term business loan through LoanBuilder. Additionally, because these loans are not affiliated with Amazon, there are no limitations on how you can use the loan funds for your business. Additionally, LoanBuilder provides fast business loans, and can get you funding as soon as the next business day.

Short-Term Loan With LoanBuilder Costs

A short-term small business loan from LoanBuilder has a fixed interest rate ranging from 6.49% to 19.31%. One of the advantages of a short-term small business loan from LoanBuilder is that there are no additional fees associated with the financing.

The rates and fees that you can expect with a short-term loan through LoanBuilder are:

• Interest rate: 6.49% to 19.31%
• Expected APR: 6.49% to 77.24%
• Origination fee: None

LoanBuilder’s minimum expected APR is lower than many of the other online business loan providers on our list. However, the minimum rate quoted would only be available to the best qualified borrowers, at the shortest repayment terms. As such, the costs associated with a loan from LoanBuilder are likely very similar to those from other lenders like OnDeck.

LoanBuilder Repayment Terms and Qualifications

Borrowers with a credit score of at least 550, at least nine months of business operations, and at least $42,000 in annual revenues, can receive a loan of up to $500,000. Repayment terms range from 13 to 52 weeks, and require weekly payments.

The terms and qualifications that you can expect with a short-term loan through LoanBuilder are:

• Loan amount: Up to $500,000
• Repayment term: 13 to 52 weeks
• Repayment schedule: Weekly repayment
• Credit score: At least 550 (check your score for free)
• Time in business: Minimum nine months
• Annual revenue: At least $42,000

LoanBuilder’s minimum credit score requirement of 550 is below the OnDeck’s requirement of 600, making LoanBuilder loans available to borrowers that may not qualify for a loan through OnDeck. However, OnDeck offers repayment terms of up to 36 months, while the maximum repayment term through LoanBuilder is only 52 weeks.

Short-Term Loan With LoanBuilder Limitations

The repayment period for short-term loans from LoanBuilder is only 13 to 52 weeks, so depending on the amount borrowed, you may have high monthly payments. If you are looking for a financing option with a longer repayment term, you may want to consider OnDeck’s short-term loan that has a maximum repayment period of up to 36 months.

How to Get Started With a Business Loan From LoanBuilder

For borrowers with a credit score of at least 550, at least nine months of business operations, and at least $42,000 in annual revenues, LoanBuilder provides business loans of up to $500,000. Application is easy, and can be completed online in a matter of minutes. Repayment terms range from 13 to 52 weeks, with weekly repayments, and interest rates range from 6.49% to 19.31%. If approved, you can receive funding as soon as the next business day.

Visit LoanBuilder

7. OnDeck for Short-Term Loans up to 3 Years and Lines of Credit: Alternatives to Amazon Loans

OnDeck offers both short-term small business loans, and small business lines of credit. Short-term loans are available in amounts ranging from $5,000 to $500,000, with repayment terms of three to 36 months. Prime borrowers (credit score of at least 700) can receive interest rates starting as low as 9.9%.

If you are interested in a line of credit, OnDeck can fund up to $100,000, at APRs ranging from 13.99% to 63.2%. Repayment terms are six months on each draw. You can easily apply online with OnDeck for a short-term loan or line of credit, and receive funding in as quickly as one day.

OnDeck Short-Term Loans & Lines of Credit At-a-Glance

How Financing With OnDeck Works

Short-term loans with OnDeck operate in the same way that short-term loans with LoanBuilder do. However, the repayment term is longer with OnDeck than you can get for a short-term loan through LoanBuilder. The application process is similar, but may require additional documentation if you are borrowing large sums of money.

Likewise, a line of credit with OnDeck works in the same way a line of credit from BlueVine does. When you are given a line of credit you are given a maximum amount which you can draw. You can make smaller draws until you reach that credit limit, and as you repay the funds they become available for you to borrow again.

Who a Short-Term Loan or Line of Credit With OnDeck Is Right For

Short-term loans, like those offered by OnDeck, are meant to fund fast and be paid off relatively quickly. If your business needs to finance something other than Amazon inventory, and requires a longer repayment term, OnDeck offers payment terms up to 36 months, making it a better choice than LoanBuilder whose maximum repayment term is 52 weeks.

For borrowers with recurring working capital needs, a line of credit from OnDeck may be a better option, as it allows you to borrow and repay the funds as needed. The flexibility of a line of credit is appealing to many small business owners.

OnDeck Short-Term Loan & Line of Credit Costs

With a short-term loan from OnDeck you can expect to be charged an APR ranging from 11% to 99%, which includes the interest rate as well as the loan origination fee that can range from 0% to 5%. OnDeck’s line of credit has an APR ranging from 13.99% to 63.2%.

OnDeck Short-Term Loan Costs

Loans from OnDeck have interest rates starting at 9.9%, but may be higher depending on your creditworthiness. Ondeck also charges a loan origination fee that ranges from 0% to 5% of your loan amount, resulting in an APR that ranges from 11% to 99%.

The typical costs you can expect with a short-term loan through OnDeck are:

• Interest Rate: Starting at 9.9%
• Origination Fee: 0% – 5%
• Expected APR: 11% – 99%

OnDeck Line of Credit Costs

An OnDeck line of credit will have an APR ranging from 13.99% to 63.2%. Additionally, an OnDeck line of credit has a $20 monthly maintenance fee. However, the monthly maintenance fee is waived for six months if you make an initial draw of $5,000 or more within five days of opening your account.

The typical costs you can expect with a line of credit through OnDeck are:

• Expected APR: 13.99% to 63.2%
• Maintenance fee: $20 per month maintenance fee; waived for six months if you draw $5,000 within five days of account opening

Both OnDeck’s short-term loan and line of credit have APRs similar to the other lenders on our list. However, OnDeck’s line of credit is the only financing option listed that includes a monthly maintenance fee. If you prefer a line of credit that does not require paying a monthly maintenance fee, a line of credit through BlueVine may be a better option.

OnDeck Repayment Terms & Qualifications

OnDeck offers loans up to $500,000, with repayment terms ranging from three to 36 months, and lines of credit up to $100,000 with repayment terms of six months. To qualify you must have a credit score of at least 600, at least one year of business operations, and a minimum of $100,000 in annual revenues.

OnDeck Short-Term Loan Terms & Qualifications

The terms and qualifications you can expect with a short-term loan through OnDeck are:

• Loan amount: Up to $500,000
• Repayment term: Three to 36 months
• Repayment schedule: Daily or weekly repayment
• Credit score: At least 600 (check your score for free)
• Time in business: At least one year
• Annual revenue: At least $100,000

OnDeck Line of Credit Terms & Qualifications

The terms and qualifications you can expect with a line of credit through OnDeck are:

• Loan amount: Up to $100,000
• Repayment term: Six months
• Credit score: At least 600 (check your score for free)
• Time in business: At least one year
• Annual revenue: At least $100,000

OnDeck’s minimum annual revenue requirement of $100,000 is higher than many of the other lenders we reviewed. Borrowers that have annual revenues below this amount may find they are better suited for a short-term loan through LoanBuilder who has a minimum annual revenue requirement of $42,000.

Short-Term Loan With OnDeck Limitations

In most cases, you’re free to use business loan funds for any needed business expense. However, some business loans for specific capital improvements or equipment financing limit usage to stated purposes. If you need funding with less restrictions, you may want to consider invoice factoring through BlueVine.

How to Get Started With a Loan From OnDeck

Getting prequalified online with OnDeck takes just a few minutes. Well qualified borrowers can qualify for a short-term loan of $5,000 to $500,000 with rates as low as 9.9%, or a small business line of credit of up to $100,000.

Visit OnDeck

8. Kabbage for a Small Business Line of Credit: An Amazon Lending Alternative

If you have recurring financing needs, a Kabbage line of credit may be the solution you need. If you have a at least 550 credit score, one year of operations, and at least $50,000 in annual revenues, you can receive up to $250,000, with an APR of 24% to 99%, and repayment terms of six or 12 months.

Small Business Line of Credit from Kabbage At-a-Glance

How a Small Business Line of Credit With Kabbage Works

Kabbage offers a business line of credit that allows you to quickly move funds into your business checking account to use for your current working capital needs. Then you simply pay off your line of credit balance with monthly payments. You’ll accrue interest and have a minimum amount due on your balance each month, like a credit card.

This is very helpful for making Amazon inventory purchases as your business grows. You’ll find that suppliers prefer wire transfer or check payments as your orders get larger. Some will even discount your order if you make up-front payments. With instant cash from your line of credit, you can take advantage of every possible deal.

Who a Kabbage Small Business Line of Credit Is Right For

Kabbage’s business line of credit works well for established businesses that have recurring financing needs. With a revolving business line of credit, as you repay the amount borrowed it becomes available for you to borrow again. This provides you with the opportunity to borrow additional funds later on without the need to reapply for a loan.

Kabbage Small Business Line of Credit Costs

Interest rates for Kabbage business lines of credit are based on creditworthiness, and can range from 24% to 99% APR depending on the credit amount and other factors. This APR range is based on Kabbage’s fixed monthly fees that range from 1.5% to 10%.

The rates and fees you can expect from a line of credit from Kabbage are:

• Expected APR: 24% to 99%
• Fixed monthly fee: 1.5% to 10%

The starting APR of 24% for a line of credit through Kabbage is higher than many of the other lenders on our list, like OnDeck that’s APR range starts as low as 11%, and BlueVine’s starting APR of 18%. However, all of the lenders have a wide APR range.

Kabbage Repayment Terms & Qualifications

To qualify for a line of credit from Kabbage, you will need to have a credit score of at least 550, have one year of business operations, and annual business revenues of over $50,000. If qualified you can receive a line of credit up to $250,000, with repayment terms of either six or 12 months.

The terms and qualifications for a line of credit from Kabbage are:

• Loan amount: $2,000 to $250,000
• Loan terms: Six months or 12 months
• Credit score: At least 550 (check your credit score for free)
• Time in business: At least one year
• Annual business revenue: At least $50,000

Comparing Kabbage to OnDeck, Kabbage has a lower minimum credit score requirement, and a lower annual business revenue requirement. However, both lenders require a full year of business operations to qualify.

Kabbage Small Business Line of Credit Limitations

With a small business line of credit from Kabbage the maximum amount you can receive is $250,000. While business lines of credit are extremely flexible and popular for funding short-term working capital needs or for busing inventory for your business, if you need more than $250,000 you may be better off with a short-term loan though OnDeck which can fund up to $500,000.

How to Get a Small Business Line of Credit From Kabbage

Prequalifying for a small business line of credit with Kabbage is quick and easy. If you’ve been in business for one year, generate at least $50,000 in annual revenue, and have a credit score above 550 (check your score for free) you may qualify for up to $250,000. If approved, you can receive funding within one to three days.

Visit Kabbage

9. Guidant for a Retirement Rollover for Business Startup (ROBS): An Amazon Lending Alternative

A Rollover for business Startup (ROBS) allows you to access your retirement savings without tax implications or early withdrawal penalties. If you have an existing retirement account with at least $50,000, Guidant can help you access those funds to fund your new business venture.

ROBS From Guidant At-a-Glance

How a ROBS From Guidant Works

If you have a retirement account, like a 401(k) or a traditional IRA, you can access those funds to start or help grow your Amazon business. Guidant can help you set up a Rollover for Business Startup (ROBS) account, which requires a minimum $50,000 investment. A ROBS allows you to access retirement savings for business purposes without paying taxes or early withdrawal penalties. Learn more in our Ultimate Guide to ROBS.

Who a ROBS From Guidant Is Right For

A ROBS from Guidant is right for anyone that has enough savings to cover startup inventory needs. Pulling from your retirement savings can be an ideal way to purchase some startup inventory and give Amazon a go. A ROBS is typically used by larger business enterprises. Whether you use personal savings, or a ROBS, you are investing in yourself and will avoid paying out interest to creditors.

ROBS From Guidant Costs

With a ROBS from Guidant, you can expect to pay an initial setup fee of $4,995. After the initial setup fee, you will be required to pay and ongoing monthly maintenance fee of $139 if your business has 10 or fewer employees. If your number of employees exceeds 10, you will have an additional monthly fee of $3.33 per employee after 10.

The costs associated with Guidant for a ROBS transaction are:

• Setup Fee: $4,995
• Ongoing Maintenance Fee: $139 per month for up to 10 employees, $3.33 per employee per month after 10.

The costs associated with setting up a ROBS may seem intimidating, but keep in mind that unlike a short term loan, or a line of credit, there are no monthly principal and interest payments. Additionally, you will not be paying tax and early withdrawal penalties for using your personal retirement savings to fund your business.

Requirements for a ROBS From Guidant

A ROBS from Guidant allows you to access your own retirement savings for use to fund your business. In order to utilize this type of financing, you need to have an existing retirement account with at least $50,000, this account cannot be from your current employer, and you must be an employee of the business that you are financing with the funds.

The requirements that you can anticipate with a ROBS from Guidant are:

• Retirement account: You must have an existing retirement account
• Retirement account savings: At least $50,000
• Retirement account with prior employer: The retirement account that you are using for the ROBS cannot be held by your current employer
• Employee status: You must be an employee of the business that you are using the funds to finance

A ROBS is the only financing option on our list that requires you to have a retirement savings account in order to receive financing. This is because you are utilizing your own funds rather than borrowing money from a lender.

Limitations of a ROBS From Guidant

You’re limited to the funds you have available in your savings to invest. If your retirement fund doesn’t have at least $50,000 in value, you can’t roll it into a ROBS. If this is the case, you may be better served by a short-term loan from a lender like OnDeck, or a BlueVine line of credit.

How to Get a ROBS From Guidant

If you have at least $50,000 of retirement funds that you’d like to use to fund your startup business, you can schedule a free consultation with a ROBS expert. Get all your questions answered and make sure a rollover as business startups is right for you.

Schedule Free ROBS Consultation

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 short-term loans and lines of credit, OnDeck is a good option for small business owners looking for immediate working capital. With OnDeck you need a credit score of at least 600, can get approved for up $500,000, and receive funding in as little as one business day.

Visit OnDeck