Ecommerce sellers looking for funding have various options, including the Amazon seller loan. If you sell products on Amazon, you may receive an invitation to participate in the Amazon Lending Program. Not every seller is eligible for the Amazon loan, so you may consider other options before meeting Amazon’s requirements. Here’s what you need to get an Amazon seller loan via Amazon Lending Program and other eCommerce financing options:
Eligibility for Amazon Lending Program
The Amazon Lending Program is designed specifically for sellers offering products on the Amazon platform. Only Amazon sellers are eligible for the loan, which is available through an invitation-only program. Amazon will invite eCommerce owners who meet their undisclosed eligibility requirements through the Seller Account. Once you get the invitation, you can apply for a loan between $1,000 and $750,000. Here are the eligibility requirements:
- Sales Threshold – Amazon sellers should have at least $10,000 in gross sales within the past year to be considered for the loan. You should also have a proven track record of consistently growing sales. Amazon needs to ensure you can repay the loan.
- Customer Service – Sellers must demonstrate high customer satisfaction ratings. Amazon will check customer reviews, complaints, and unresolved issues for the past six months. Sellers with poor customer metrics are ineligible for the lending program.
- Guidelines Violation: Amazon has strict guidelines for sellers offering products on the platform. Violating any of the provided guidelines and policies can result in your store being closed. Non-compliant sellers are also ineligible for the lending program.
- Trademark & Copyright: Amazon will review your store for any outstanding trademark and copyright infringements and complaints. Sellers with copyright infringement complaints may have their store closed and won’t be invited to the lending program.
Waiting for Amazon to qualify you for their loan product may not be an option. Ecommerce sellers, including those offering products on Amazon, have various other lending options. Popular loan products include merchant cash advances, credit card loans, peer-to-peer financing, personal loans, and business term loans. Here’s an overview of each loan product and what Amazon sellers need to qualify:
a) Business Term Loan
The business term loan is a traditional financing option available at banks, credit unions, and online direct lenders. The loan offers one lump sum credit with a fixed interest rate and is repaid with regular payments. Business term loans vary from lender to lender, so there’s no standard eligibility. You have a better chance if you have a minimum credit score of 600. Other requirements include at least one year in business and minimum annual revenue of $100,000.
b) Merchant Cash Advance
The merchant cash advance loan offers a lump sum payment in exchange for a percentage of future sales. MCA loans are deducted from future credit and debit card sales and generally feature low factor rates. Sellers must have a personal credit score of at least 500 and more than six months in business. The eCommerce must also demonstrate bank deposits of at least $15,000 per month, but each lender has unique requirements.
c) Credit Card Loans
Amazon sellers yet to be invited to the lending program can consider business credit card loans. Taking a credit card loan isn’t the recommended choice because they feature high-interest rates. However, such loan offers may be the only option to secure funding for emergency procurement and short-term expenses. Sellers need business credit cards with good to excellent credit scores and enough income to cover the debt.
d) Peer-to-Peer Financing
P2P loans involve receiving funding from investors rather than lenders. The arrangement is facilitated by a P2P provider who allows borrowers to pitch their business via the P2P platform. Investors can then bid on the business and offer the funding requested. Some P2P loans are crypto-backed, but most require a specific minimum credit score. A hard credit check is always necessary before borrowers are approved for a loan, especially if no collateral is offered.
e) Personal Loans
Amazon sellers can take a personal loan and invest the money into their business. A personal loan is more like a business term loan or line of credit. The only difference is the loan is based on your personal credit score and qualifications. Personal loans also feature lower limits than business loans. Most lenders will review the credit score, except for loan products backed by some form of collateral. The lender will also review your financial and personal information.
Amazon Seller Loan for Small Businesses
Thanks to reputable lenders like Sellers Funding, finding the best Amazon seller loan shouldn’t be a problem. Each loan product has unique terms and requirements that suit different eCommerce sellers. As an Amazon seller, you should review all offers and choose top-rated lenders. The goal is to get quickly approved for loans with higher limits and lower fees. Review all requirements to ensure your Amazon business revenue can cover the loan.