Financing for Amazon Sellers : 5 Solutions You Need to Know About

By Christopher Grant

July 19, 2024


We all know that e-commerce is booming, and Amazon is the go-to place for many entrepreneurs looking to make their mark. In fact, Amazon's revenue in 2023 alone hit a staggering $574.78 billion! Talk about a gold mine of opportunities! As Henry Ford once said, "Whether you think you can or you think you can't, you're right." This philosophy rings especially true in the Amazon marketplace, where success, just like any other endeavor, hinges on having the right mindset and resources.

However, like any venture, there are hurdles to overcome. The initial costs of inventory, marketing, and logistics can feel like a steep mountain to climb. Many sellers find themselves asking, "Where do I find reliable financing?" and "Which options are best for my business?" These financial challenges can be a major roadblock, preventing sellers from scaling their operations and reaching their full potential on Amazon.

But don't despair!  There are solutions available.

So, how can you turn this challenge into an opportunity? Well, to help you solve this funding puzzle, we've put together a guide outlining five financing options specifically tailored for Amazon sellers. These financing for Amazon sellers can be your key to unlocking the capital needed to not just survive but thrive in this competitive environment.

1. SBA Microloan

We understand that as an Amazon seller, your business is always on the move. But sometimes, a little extra financial support can make all the difference in taking your business to new heights. That's where the SBA Microloan program comes in.

The SBA Microloan program isn't just another financing for Amazon sellers; it's a partnership. The U.S. Small Business Administration teams up with specialized lenders who understand the unique needs of small businesses and e-commerce sellers. They offer loans from $500 up to $5.5 Million, with a comfortable repayment period of up to 6 years, giving you ample time to manage your finances.

Interest rates typically fall between 8% and 13% APR, making this a competitive financing option. Keep in mind that each lender has its own specific terms and rates, so it's worth exploring different options to find the perfect match for your business goals and budget.

Who's Eligible for SBA Microloan?

The SBA Microloan program is designed for a variety of businesses including but not limited to:

  1. For-profit small businesses operating in various industries.
  2. Startups that are just getting off the ground.
  3. Businesses with limited credit history or less-than-perfect credit scores.

While there are no minimum personal credit score requirements, most lenders will ask for some form of collateral and a personal guarantee.

What Makes the SBA Microloan Shine?

  1. Flexibility: Use the funds for inventory, supplies, working capital, equipment – whatever your business needs to thrive.
  2. Accessibility: Designed for businesses that might not qualify for traditional bank loans.
  3. No Minimum Credit Score: Many lenders don't require a minimum personal credit score.
  4. Business Mentoring: Some programs offer valuable business mentoring services.

A Couple of Things to Keep in Mind

  1. Not for Everything: This loan isn't intended for existing debts or real estate purchases.
  2. Application Process: The process might require some paperwork and time for approval.

Ready to Take the Next Step?

Finding a participating lender is easy! Head over to the SBA website or get in touch with your local SBA office. They're ready to help you navigate the process and find the perfect fit for your business.

2. Amazon Lending

Amazon Lending

Amazon Lending is like a secret weapon, exclusively available to select Amazon sellers looking to level up their businesses. This invitation-only program offers short-term loans, from $1,000 to a whopping $1,000,000, designed specifically for your needs on the platform. With repayment terms ranging from 3 to 12 months, helpful low interest rates, and a simple application process, it's all about making financing accessible and hassle-free.

Who Should Consider It?

This program is a valuable resource for established Amazon businesses with a track record of consistent sales growth. If you're looking to expand inventory, invest in marketing, or simply need a financial boost, Amazon Lending could be a viable solution.

However, it's important to borrow responsibly and ensure that any loan aligns with your overall business strategy.

Key Benefits: 

  • No credit checks required.
  • Quick approval and funding process.
  • Funds deposited directly into your seller account.
  • No origination fees or prepayment penalties.
  • Personalized loan offers based on your sales performance.

Important Considerations: 

  • Repayments are automatically deducted from your seller account, regardless of sales fluctuations.
  • This is an invitation-only program; you cannot apply directly.
  • Loan funds must be used for your Amazon business activities.
  • Short-term loans typically come with higher monthly payments.

Ready to Grow?

If you're eligible, you'll get an invitation right in your Seller Central account. Don't miss out on this chance to accelerate your business!

3. Viably

Viably

Viably, a financial platform promises to be a complete financial management system built specifically for Amazon sellers like you. It seamlessly blends funding, forecasting, and business banking, providing you with a holistic view of your financial health and a roadmap for growth.

Features That Set Viably Apart

  • One-Stop Shop: All your financial needs, from funding to forecasting, are met in one convenient platform.
  • Real-Time Intelligence: Viably analyzes your current sales data to tailor funding offers specifically to you.
  • Transparent Costs: No hidden fees or surprises – Viably uses a simple, one-time flat fee structure.
  • Flexible Funding: Choose from three different funding models, each designed for different selling strategies.
  • Dedicated Support: Viably's customer-facing team is made up of experts who understand the unique challenges of Amazon sellers.

Who's Viably Perfect For?

Viably is your ideal partner if you're an established Amazon seller looking to scale your business and gain a deeper understanding of your finances. It's especially valuable for sellers who prioritize a comprehensive approach to financial management and want personalized funding solutions.

Pros:

  • Comprehensive financial toolkit all in one place.
  • Personalized funding based on your real-time sales data.
  • Transparent and straightforward pricing with no hidden fees.
  • Flexible funding models to suit your specific business needs.
  • Dedicated support team with Amazon expertise.

Cons:

  • May not be suitable for brand new Amazon sellers.
  • Specific eligibility requirements and fees are not publicly disclosed.
  • Could have a learning curve to fully utilize all the platform's features.

With three customizable funding models, including one specifically for wholesalers, Viably ensures you get financing that aligns perfectly with your unique business needs.

Their dedicated team of Amazon experts works closely with you, understanding your challenges and providing personalized support every step of the way.

By harnessing Viably's powerful tools and insights, you're not just taking control of your finances; you're unlocking a world of growth opportunities for your Amazon business.

4. Amazon Merchant Cash Advance Program

Amazon Merchant Cash Advance Program is a new way to get the funds you need, right when you need them, with terms that are actually designed to work for you.

What's the Big Deal?

Amazon has teamed up with Parafin, a financial whiz, to create a cash advance program that's shaking things up. Instead of traditional loans, you get a cash boost, and you pay it back as you make sales. The best part? No hidden fees, no credit checks, and no pressure – just simple, straightforward terms.

You can borrow anywhere from $500 to a jaw-dropping $10 million, with a fixed capital fee (interest-free) and no minimum payment requirements.

What's in It for You?

This program isn't just about money; it's about giving your business the freedom to grow. You only pay back a percentage of your sales, so there are no worries during slower periods.

Plus, there are no mandatory monthly payments, no interest charges, and no surprises. It's all about transparency and empowering you to succeed.

Who's It For?

  1. Open to sellers with a minimum of three months of selling history on Amazon.com
  2. Participation is by invitation only

Why Should You Care?

This program is a game-changer because it understands the unique needs of Amazon sellers. It's about giving you the tools to thrive, whether it's by buying more inventory, launching exciting new products, or simply keeping your cash flow healthy.

Pros:

  1. Empowers small- and medium-sized businesses with vital capital for growth
  2. Shields sellers during slow sales periods – Payments are only required when sales occur
  3. Absence of mandatory monthly minimum payments
  4. Transparent fixed capital fee structure, free from interest charges
  5. Liberated from fixed terms, personal guarantees, credit checks, excessive paperwork, late fees, and collateral requirements
  6. Versatile use of funds to bolster your Amazon business:
    -Inventory Acquisition
    -New product development
    -Margin protection
    -Cash flow management
    -Offers a dynamic payment schedule based on a fixed percentage of the seller's sales

Cons:

  1. The minimum eligibility requirement of three months of selling history
  2. Exclusive invitation-only access

So, keep an eye on your Seller Central account and look out for that invitation. This could be the financial boost your business has been waiting for!

5. SellersFunding

SellersFunding

SellersFunding, now called SellersFi, is a financial tech company with a unique focus: helping e-commerce businesses, especially Amazon sellers like you, thrive. They use cutting-edge technology to make borrowing easier and more accessible, even if you don't fit the mold for traditional bank loans.

What sets SellersFunding apart? They connect directly to your Amazon account, getting a real understanding of your business so they can offer you funding that truly makes sense for you. While their starting APR of 18 percent might seem a bit high, it's important to see the bigger picture — its all about opening doors for sellers who might otherwise struggle to find financing.

Why Choose SellersFunding?

  1. They specialize in e-commerce businesses, especially those on Amazon.
  2. They use technology to make the whole process smooth and efficient.
  3. They tailor financing to your specific business based on your Amazon data.
  4. They're open to a wider range of sellers, even those who might not qualify for traditional loans.

Things to Consider:

  1. The starting APR is 18 percent, which might be higher than other options.
  2. SellersFunding might not be the cheapest choice for everyone.
  3. They rely heavily on your Amazon data, so make sure it reflects your overall business health.

Who's It For?

SellersFunding is a great option if you're an Amazon seller who:

  1. Needs funding but hasn't had luck with traditional banks.
  2. Is looking to grow your business and needs a financial boost.
  3. Has limited credit history or doesn't meet typical lending requirements.
  4. Prefers a tech-savvy and efficient financing process.
  5. Is comfortable with potentially higher rates for easier access and personalized solutions.

Remember, knowledge is power. Take the time to research SellersFunding and see if they're the right fit for your business goals. Even with a higher APR, they might be the key to unlocking your next level of success.

The Final Verdict

In the dynamic world of Amazon selling, we know financial flexibility can be the key to unlocking your business's full potential. Whether you're a seasoned seller looking to scale or a newcomer eager to make your mark, these five financing options offer a range of solutions to meet your unique needs.

Remember, the best choice for your business will depend on your specific circumstances, goals, and risk tolerance. Take the time to carefully assess each option, weigh the pros and cons, and choose the path that aligns with your vision for success.

With the right financial partner by your side, you can confidently navigate the challenges of the Amazon marketplace and achieve your entrepreneurial dreams. We're rooting for you!

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