Amazon Lending Review: Tough to Recommend With Little Information Available
Amazon offers a few types of financing products to Amazon Sellers. But you may only apply if invited, and all products are issued through third-party providers.
Loan details
Min. Loan Amount
$1,000
Qualifications
Min. credit score
670
Pros & Cons
Pros
Competitive interest rates.
Lendistry partnership gives preference to historically underserved business owners and communities.
Cons
Eligible to apply by invitation only.
Details of third-party lender agreements may be less obvious.
Amazon doesn't disclose many details of its exclusive financing program, Amazon Lending, which partners with external lenders to offer small-business loans. The program includes term loans, business lines of credit and merchant cash advances.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Consider Amazon Lending if you:
- Are already an Amazon seller. Amazon Lending is available only to businesses that are active on the platform. You must receive an invitation to apply.
- Need the funding. Just because you receive an invite to apply doesn't mean you should accept the offer. Make sure you have a specific plan for how you’ll spend the money and how you'll pay it back.
- Received a competitive offer from Amazon Lending. Before accepting, compare your Amazon Lending offer to other small-business loan offers. You may be able to get better rates and terms elsewhere.
Not a fit? Consider these options instead.
Compare multiple offers before committing
We recommend pre-qualifying for loan offers from other lenders before borrowing from Amazon Lending. That way, you can compare loan rates and terms. A lower APR or smaller monthly payments may make a big difference in your cash flow over time. You can compare many loan offers at once using a business lending marketplace like NerdWallet.
Amazon Lending products at a glance
| Financing product | Lender | Best for |
|---|---|---|
| Term loan | Amazon Community Lending, a partnership with Lendistry | Minority-owned businesses; businesses serving lower income communities. |
| Term loan | Uncapped | Retailers that are growing quickly. |
| Term loan | QuickBooks Capital | Small businesses that already use QuickBooks accounting software. |
| Business line of credit | Uncapped | Access to funding when and only as needed. |
| Merchant cash advance | Parafin | Sellers who need fast cash; merchants who don’t have or don’t want to offer up collateral. |
Amazon Lending products: A closer look
Amazon Community Lending and term loans
Amazon Community Lending offers term loans to small businesses in “socially and economically distressed communities.” These loans are made in partnership with Lendistry, a community development financial institution.
Amazon has two other offerings for business term loans. One is in partnership with Uncapped, an alternative lender that specializes in financing for Amazon sellers. The other is in partnership with QuickBooks Capital.
Specific details of offers made through Seller Central will vary. But based on the information available on Uncapped’s website, you may be eligible for this short-term business loan if you earn at least $10,000 in monthly recurring revenue (MRR). You’ll also need at least six months in operation to qualify. The company determines your loan amount based on your MRR and will typically loan up to 1 to 1.5 times your MRR.
If you already use QuickBooks for your accounting, then you may get an offer for a term loan from QuickBooks Capital. These loans are offered in amounts from $1,500 to $200,000. The lender’s software syncs with your QuickBooks data to decide if you qualify.
If you receive an offer for an Amazon Lending term loan:
- Compare your business loan interest rate to the market overall.
- Use a business loan calculator to understand your payments.
Amazon business line of credit
Amazon also partners with Uncapped to offer business lines of credit. Like any line of credit, you only pay interest on the amount you draw. But one feature of this product you’re not likely to find with many other lines of credit: Your line increases as your revenue grows. It’s a revolving line of credit, which means your credit limit resets each time you pay it off. In this way, it works a lot like a credit card.
Read NerdWallet’s review of the Amazon business line of credit.
Amazon merchant cash advances
Merchant cash advances (MCAs) are among the most expensive types of small-business financing, and NerdWallet recommends them only as an option of last resort.
Parafin is the third-party lender Amazon Lending partners with to provide MCAs. It offers anywhere from $500 to $10 million in financing. Your offer is based on your Amazon sales history. Parafin does not run a credit check and does not require collateral.
⚠️ Merchants have much to say in Amazon’s seller forums about Parafin’s MCA. Many, though not all, comments are negative. So, proceed with caution. If this is your only option, we encourage you to read your agreement thoroughly and get all of your questions answered before signing.
Where Amazon Lending stands out
Online invitation and application process
Amazon Lending invites you to apply for specific products based on your sales data. You can accept the offer right in Seller Central. You review the terms and complete the application all online. Amazon claims the application takes only minutes to complete. In theory, this saves you the effort of hunting for business loans yourself.
However, we recommend you still do your research before accepting an offer from Amazon Lending. To position yourself for the best offer, take the information you get from Amazon and use it to guide your search. Compare the same type of loan product — term loans or business lines of credit, for instance — from other lenders and see whether you qualify for a lower interest rate or longer terms.
Quick approval and funding
Amazon states that you’ll usually receive a decision from the lender within three business days and funds within two business days after approval. A total of five business days from application review to receiving funds is relatively quick. It certainly beats the weeks to months that many bank and SBA loans take. That said, many alternative lenders offer even faster turnaround times on approval and funding. Some can get it done in 24 to 48 hours.
Where Amazon Lending falls short
Little transparency about the products it offers
As of this writing, Amazon Lending hasn’t published many details about its multiple financing products.
Information like minimum and maximum loan amounts, APR ranges and maximum loan terms can help you understand whether you’re qualifying for a competitive offer or not — and that information may shape whether you accept an offer or shop around.
Amazon doesn’t disclose any of this information on its Amazon Lending program page. The details we gathered for this review came mostly from seller forums and Reddit threads.
You can only apply for the product you’re invited to
If Amazon invites you to apply for Amazon Lending, you’ll see the loan option on your Seller Central homepage. You can choose whether you want to apply for that particular offer. But if your invitation is for a merchant cash advance, for example, you can’t apply for a business line of credit.
Sellers may be tempted to accept a riskier, more expensive form of financing, then, not knowing if a better fit may open up at a later time.
Funding issued through third-party lenders
Because Amazon itself doesn’t issue loans, you’ll be dealing with one of its partner providers. When you work with two separate parties in these types of transactions, some things can get lost in translation, like the precise details of your agreement.
Amazon Lending, for example, may advertise certain loan amounts or payment periods for a product on its site. But by the time you’ve completed the application and underwriting process with the third-party lender, the details of your loan terms and amount may look a bit different.
You can avoid surprises like this by carefully and thoroughly reading through the loan agreement before signing it. You may even want to have it reviewed first by a business attorney.
Amazon Lending alternatives
If you get a financing offer from Amazon Lending, compare it with other products of the same type:
- Business term loans: Many of the lenders on NerdWallet’s list of best online business loans will make a preliminary loan offer after a simple online application. Comparing the terms of these offers with Amazon Lending’s offers can help you choose the best option for your business.
- Business lines of credit: As with online term loans, you may be able to get a preliminary offer for a business line of credit quickly online, then compare that offer with Amazon’s.
And consider these other financing options, as well:
- Microloans: If your Amazon Lending offer is for less than $50,000, consider applying for an SBA microloan or microloan from a nonprofit lender to compare your loan options. Microloans are typically issued by CDFIs and designed for businesses that are new, small or still developing consistent revenue.
- Business credit cards: If your business is too new to qualify for other business loan options, consider applying for a business credit card. You can use it to cover your business expenses while you’re still developing consistent revenue, then pay it back as you’re able. But be aware that credit card debt may come with higher APRs than loans. Qualification often depends on your personal credit score, not your business history.