Amazon

Amazon’s Loans To Marketplace Sellers Reach $1B

Amazon Foodservice Apprenticeship

According to reports out this morning, Amazon.com has lent over a $1 billion in loans to its marketplace sellers over the last year — slightly less than the $1.5 billion it lent during the 4 years between 2011 and 2015.  Funds lent to merchants from Amazon are usually put toward expanding their inventory.

Boosting sales for sellers is in Amazon’s best interest on a few levels. First, it takes a cut of all third-party sales on its marketplace — and it has an increasingly lucrative sideline as a logistics firm for its retail partners, as it will ship, sell and place their goods on the site if they pay to be a customer.

More than 20,000 small businesses have received a loan from Amazon, and about half are repeat borrowers. On average, loans range from as little as $1,000 to as much as $75,000. Interest rates clock in between 6 percent and 14 percent per year.

“We do tell them it’s to help them grow on the Amazon Marketplace,” noted Peeyush Nahar, vice president for Amazon Marketplace.

The loans do open Amazon to additional credit risk, but the marketplace’s real-time data on sellers’ businesses and access to their customer reviews are both useful tools for risk assessment in loan underwriting.

Amazon has issued loans to sellers in the United States, United Kingdom and Japan.

And the firm plans to roll it out further. When?

Nahar said, “Stay tuned.”

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