In 2011, Amazon launched its Lending Division, a platform that provided Amazon’s Fufillment-by-Amazon (FBA) sellers with access to short-term capital for inventory orders. Through their platform, sellers could access term loans, lines of credit, and revenue-based funding options.
However, on March 6th, 2024, the eCommerce giant suddenly announced that the Lending Division would no longer continue underwriting business loans themselves. Although they’ll continue to service current loans, the rug-pull on something sellers relied on projects to create cash flow challenges amongst the community that makes up 60% of Amazon’s offers.
National Business Capital is here to help sellers establish a new financing relationship that can support their inventory orders. Clients work with their dedicated Business Finance Advisor to access the most competitive business financing offers from our diverse lender platform. We can help with immediate capital needs as well as future projects, all while advising you on how to maximize the potential of your opportunity.
Continue reading for more information on Amazon’s changes to it’s Lending Division. If you want to learn more about the options your business qualifies for, complete our easy application.
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What Is Amazon’s Lending Division?
Those within the community are already familiar with this program, but it’s essentially Amazon’s in-house business financing platform. Sellers were able to access term loans, lines of credit, and revenue-based financing to support inventory orders for Amazon only. Processing and loan disbursement speeds were faster than if the sellers were to go through their traditional bank, which drew massive attention from the seller community.
Their decision to halt this program as of March 6th, 2024, removes the financial backing that so many sellers relied on to sell their products and creates a major capital challenge.
Why Did Amazon Stop Underwriting Loans to Sellers?
Although unconfirmed, the general sentiment among analysts is that Amazon became concerned about rising default rates within the program. They’ve stated that “trusted third-party [capital] providers” will work as an alternative to their program, but this will require sellers to start an entirely new financing relationship that will be initially unfamiliar with their business.
Considering that the program started in 2011, many sellers likely have longstanding relationships with Amazon’s Lending Division that streamlines each transaction. If they choose to transition to one of the “trusted third-party” lenders Amazon has yet to identify, they’ll face a higher level of scrutiny on their initial transaction than what they were used to with Amazon’s in-house program, which may delay the arrival of their funding.
Amazon’s decision creates an interesting opportunity for sellers to establish new, stronger financing relationships that can carry them further than their previous lenders.
Who Are Amazon’s “Trusted Third-Party” Lenders?
This information isn’t widely available just yet, but that creates a problem in itself. Amazon sellers searching for a new capital source need to understand the organization they’re getting into business with. Not just for protection against fraud and bad debt, but also to evaluate whether or not that organization is capable of scaling with sellers as they grow.
Lenders have specific funding ranges in which they can operate. If a client requires an amount higher than what they can provide, the request is denied, regardless of whether it’s a new client or one that’s worked with them for 10+ years. Growing businesses must take this into account when searching for a new lender so they’re not switching their relationship again only a few months later.
The ambiguity of their new lending options should make sellers question whether or not they should work with them, especially when there are better organizations out there.
Why Should Amazon Sellers Work With National Business Capital?
National Business Capital maintains a diverse lender platform to provide our clients with the simplest, most convenient avenue to access capital. A relationship with us ensures that your business always has access to the capital you need for inventory orders and other components of your growth plan without the usage restrictions imposed by Amazon.
Because of our longstanding relationships with lenders and the expertise of our team, our clients are able to scale their funding amounts and improve their terms, transaction after transaction. We’re also able to help clients access capital midway through their loan term, too, which can help them take advantage of opportunities that arise during repayment.
Some financing programs you can access through National Business Capital include:
| Type of Financing | Description |
| Revolving Business Line of Credit | Flexible access to capital, where you can draw funds as needed up to a certain limit. It’s a short-term solution that can become a long-term resource with no hard credit checks or prepayment penalties.
There are no usage restrictions; Amazon sellers can use the funds for inventory, R&D, marketing, and many more capital needs. |
| Business Term Loans | Lump sum funding to manage over a short or long term, depending on your needs. Simple APR interest, with potential credit-building perks.
Term loans are a great option to break down the cost of larger-scale projects or sizeable inventory orders. |
| Accounts Receivable Financing | Unlock the value of your outstanding receivables and receive access to capital based on their value.
This option can help sellers whose net 30s and net 90s look more like net 120s. |
| Revenue-Based Financing | Lump sum funding to manage over a short or long term, depending on your needs. Eligibility criteria focus on historical cash flow instead of credit scores, and businesses repay the funds through automatic deductions from their sales.
Revenue-based financing is best for sellers with less-than-perfect credit who generate consistent revenue. |
It doesn’t make sense for a business to invest time and effort into a relationship only to outgrow it within a few months. With National Business Capital, Amazon sellers can access the capital they need—when they need it—with a dedicated Business Finance Advisor to streamline the process.
Complete our easy application to start a financing relationship with an organization that can assist you at every stage of your growth plan.
Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advice from National Business Capital and the author. Do not rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely on this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there may be errors, omissions, or mistakes.
Phil Fernandes
Phil Fernandes serves as Chief Operating Officer for National Business Capital. He boasts 15 years of experience in sales and 10+ years of management experience as National’s VP of Financing/Analytics. Phil is also an excellent writer who's completed the Applied Business Analytics executive program at MIT and regularly contributes articles to National Business Capital’s blog.
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