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09/22/2021

Amazon offers loans up to $100,000 for small sellers

Dan Berthiaume
Senior Editor, Technology
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Amazon is creating new financing opportunity for third-party sellers.

Small-to-medium-sized businesses selling products via Amazon storefronts have new, expanded financing options.

The e-tail titan is partnering with Lendistry, a minority-led community development financial institution (CDFI), to expand the business financing options it offers sellers via its Amazon Lending program. Under a joint pilot program called Amazon Community Lending, the companies will provide loans of up to $100,000 to help fund business needs such as inventory expansion, brand building, and customer acquisition.

Amazon Community Lending is a new business financing option through Amazon Lending. It will provide U.S.-based Amazon sellers, nearly all of which are small-to-medium-sized businesses (SMBs)—access to short-term loans of up to $100,000 at what Amazon says will be competitive and affordable rates to sustain and grow their businesses.

Together, Amazon and Lendistry have developed a lending solution designed specifically for Amazon sellers. Lendistry will provide term loans targeting a range from $10,000 to $100,000, with periods of up to two years and annual percentage rates generally ranging between 8% and 9.9%.

Amazon sellers can use the working capital to grow their business in Amazon’s store and to cover other strategic business needs, including staffing and operations costs, inventory, product development and manufacturing, and marketing efforts.

Amazon Lending began offering loans to businesses selling in its store in 2011. Year-to-date, Amazon and third-party lending partners have lent more than $800 million to SMBs in the U.S.

According to Amazon, third-party sellers account for more than half of all units sold in its store. All U.S.-based Amazon sellers can apply for financing options from Lendistry.

The majority of the funds Lendistry has historically disbursed have gone to traditionally low-to-moderate income and other historically disadvantaged business owners and communities, including African-American and Hispanic-Latino populations, and individuals from CDFI-designated investment areas.

In 2020, Amazon says it invested more than $18 billion into its third-party selling partners, including tools, services, programs, infrastructure, and people. Between its June 2021 Prime Day sales event and throughout the rest of 2021, Amazon says it will have invested more than $100 million to support small businesses selling on its platform, including promotional activities to encourage customers to shop with them. Small-and-medium-sized businesses (SMBs) offered more than 1 million deals during Prime Day 2021. 

“We are thrilled to launch the Amazon Community Lending pilot program in the U.S. to provide greater access to critical working capital and make the opportunity of selling in Amazon’s store more accessible to even more U.S. small businesses,” said Dharmesh Mehta, Amazon VP for worldwide consumer trust and partner support, in a corporate blog post. “Lendistry shares our commitment to championing underrepresented populations of business owners, knowing they often lack access to traditional methods of accessing capital and similar economic opportunities.”

“Amazon came to us with this incredible idea,” said Everett K. Sands, founder and CEO of Lendistry. “They’re on a mission to support and empower minority-owned businesses, just like us, so it was a great fit. The Amazon seller community is the perfect place to make these kinds of financing programs available that can truly make a difference for a lot of businesses."”