After a year, Amazon plans to continue with the loan system for sellers in the market that work in the country or economic crisis.
Amazon has partnered with Lendistry, a small-scale community development company. Together, Amazon and Lendistry provided $35 million in loans to up to 800 retailers during the initial phase of the program, which began in September 2021.
According to an Amazon report at the beginning of the pilot program, small and medium businesses can apply for up to $100,000. The loan terms are up to two years with annual interest rates ranging from 8% to 9.9%.
Colsen, an e-commerce company in Miami, Florida, received a loan during the trial. A business, which manufactures and sells household goods, qualifies as a business operating in a community with social or economic problems.
Armando Colimodio, owner of Colsen, said, “At Colsen, we have a big goal to start the business, but the need for capital to support it is very important.” “By working with Amazon Community Lending, we have been able to capitalize on our business and expand our extensive product selection through the program’s quick and easy financing process. We expect to double our sales this year and continue to strive to grow our product portfolio.”
Based on the success of the pilot program, Amazon has made the local lender one of its ongoing financial offerings, alongside interest-only loans and commercial lines of credit relationships with Marcus through from Goldman Sachs, an online platform offering loans and savings accounts. to marketers. customers.
The Amazon Community Lending Program will provide loans of $10,000 to $250,000 at “competitive and affordable rates” for five years or less to select Amazon sellers in struggling US communities.
The program is expected to lend about $150 million over the next three years, according to Amazon.
Sellers interested in learning more about the program can find details in their Seller Central account. But this program is call-only at write time.
This addition to Amazon’s lending program isn’t the only way small and medium businesses, in struggling communities or otherwise, can access capital.
For example, Shopify Capital has been providing financing for e-commerce businesses since April 2016. The program uses machine learning in the loan approval process, assuming that it takes into account the performance of e-commerce businesses. Shopify Capital claims to provide hundreds of millions of dollars in revenue every quarter.
Kabbage offers a line of credit up to $250,000 for small businesses. The company, now part of American Express, has lent more than $5 billion since its inception in 2009.
Other small business lenders include Kickfurther, Wayflyer and Clearco.
Considering a loan?
Whether a business should go into debt or not is the best decision made by each owner.
In general, if the business is doing well, the loan can support expansion, product development, marketing, merchandise, etc.
But if your business is struggling, going into debt may not be the best option. In this case, financing with equity investors may be a better option.
Finally, remember how potential lenders will judge you.
Most lending programs, such as Amazon Community Lending, require businesses and their owners to meet financial and other criteria, such as:
- Credit report,
- Cash flow,
- Sales reports,
- Profit Profit,
And plans for the money.