Amazon Lending Review: Should Sellers Take Loans From Amazon?

9 min read
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Executive Summary

Is Amazon Lending the right fit for your Amazon seller business? Here are the pros and cons, plus our top alternative.

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Are you an Amazon seller looking for a loan to help you grow your e-commerce business? You may have noticed a little notification pop up on your Amazon seller dashboard informing you that you qualify for financing. On the other hand, you may have just heard rumors about Amazon loans. Either way, the big question is—is Amazon Lending a good idea for sellers? Here are the basics you need to know.

What is the Amazon Lending loan program?

Amazon Lending is an invite-only financing program for Amazon sellers. In short, it provides loans and lines of credit to eligible U.S. small and medium-sized businesses. Approval is based on an account holder’s Amazon sales and account activity—not their credit. Amazon claims it can get qualifying sellers the financing they need without long wait times or much paperwork.

Amazon Lending financing options

Amazon Lending is currently offering the following four financing options to eligible U.S.-based businesses.

Term loans

First, term loans are offered through Amazon Lending and its network of third-party online lenders, as well as through a partnership between Amazon Lending and Lendistry (more on them below). The loans provide borrowers with a lump sum loan amount that must be repaid over a specific period—such as one year. The interest rates are fixed, so the monthly payments will be the same throughout the loan term. These can be helpful when you need a lump sum all at once.

Interest-only (IO) loans

Next, interest-only loans are another option. They’re similar to term loans in that they involve a lump sum amount, fixed interest rates, and specific repayment terms. However, they also offer an initial period where you only have to make payments on the interest—the principal payments are deferred.

Once the interest-only payment period ends, you'll have fixed monthly payments over a set term that include both the principal and the interest charges. IO loans can be helpful if you’re not quite ready to make the full repayments right off the bat.

Business lines of credit

The third option is a business line of credit which is provided through Marcus by Goldman Sachs. Lines of credit provide business owners with a specific amount of credit that they can draw from as needed, similar to a credit card.

Approved borrowers will be given a specific credit limit and can use up to that amount. Interest accrues on the outstanding balance according to a fixed interest rate that’s locked in for the duration of the agreement.

You may find the credit line route helpful if you aren’t sure exactly how much you want to borrow or if you plan to use the loan amount over time.

Merchant cash advance (MCA)

Amazon sellers may also qualify for a merchant cash advance (MCA) provided by business financing provider, Parafin. MCAs offer eligible borrowers a lump sum upfront. Instead of charging interest, they come with a fixed capital fee. The fee is added to the MCA amount and then the total is repaid through the seller’s future sales. As sales come in, a percentage is automatically deducted to repay the MCA.

With this option, you don’t have to worry about manually making your repayments. However, your business’s cash flow will take a hit until the amount is repaid in full.

What can you use Amazon Lending financing for?

The Amazon Lending program is designed to help Amazon sellers invest in and grow their businesses. The bottom line is—all loan or credit line proceeds must be used to directly support your selling business on Amazon or on your Amazon webstore site. For example, businesses can use the funds as working capital to improve cash flow, purchase inventory, and cover marketing expenses. They can’t use them to pay their rent, refinance their vehicle, or pay off a business debt.

Who's eligible for Amazon Lending?

Amazon Lending is an invitation-only program that’s offered to qualifying Amazon seller accounts. Eligibility doesn’t depend on the business's or business owner's credit score. Instead, it's based on seller account metrics such as sales volume and the inventory levels a seller has at Amazon’s fulfillment centers. Additionally, you must be at least 18 years old, must be authorized to apply for a loan on behalf of the qualifying business, and can’t be an employee of Amazon or any of its affiliates.

How the Amazon Lending program works

All Amazon seller accounts will automatically be considered for the Amazon Lending program. If your account is eligible to apply, you'll receive a notification on your Seller Central homepage.

Once you see that you're invited, you can then click on the notice to learn more about your financing options. Depending on the loan product you choose, you’ll either be guided to complete the application online through Amazon Lending, or through one of its partners such as Parafin, Marcus, Lendistry, or another online lender.

If you complete the application with Amazon Lending, you can expect to get a loan decision within five business days. Upon approval, you can have the loan amount deposited into your bank account. Then, you’ll begin your loan repayments according to the agreed-upon terms. Timelines can vary with the other partners.

Pros and cons of the Amazon Lending program

Here’s a quick summary of the pros and cons of the Amazon Lending program.


  • Bad credit scores or reports won’t hold you back
  • Quick online applications and approval decisions are provided
  • Amazon sellers are automatically notified when they are eligible
  • Various loan product types are available
  • Convenient short-term funding for Amazon businesses
  • Amazon Community Lending program focuses on supporting underserved business owners


  • The lending program is invite-only
  • Specific eligibility requirements are not disclosed
  • Amazon Lending is secured by any inventory you have at Amazon fulfillment centers, all seller account disbursements, and affiliate payments by Amazon or its partners
  • Your loan can go into default for non-payment, ceasing product sales on Amazon, ordered product sales dropping below a certain percentage, and more
  • Lack of flexibility: You can only use the funds for your Amazon seller storefront, not for any other costs associated with running your business

Is the Amazon Lending program a good idea for Amazon sellers?

The Amazon Lending program can be helpful for Amazon sellers who've earned an invite. A full lineup of competitive borrowing options is available that can suit a variety of needs. Further, it offers an alternative to typical credit-based lending.

If your personal credit isn’t great or is maxed out, it can be hard to get approved for a business loan. Further, if you haven’t established business credit yet, you’ll be hard-pressed to find a business lender that’ll approve you without a personal guarantee or deposit. Amazon doesn’t base approval on your credit so provides an alternative route to getting the business funding you need.

However, it’s important to realize that since Amazon Lending isn’t basing its lending decision on your credit, it’s securing any amount you borrow with your Amazon seller account. That means if you can’t make the payments, Amazon Capital has the right to seize inventory you’re storing at its fulfillment centers, your seller disbursements, and your affiliate payments. This could be detrimental to your business so is something to keep in mind.

Overall, if you get notified that you qualify for Amazon Lending, it’s worth considering, but it’s not a bad idea to compare the rates and terms against a few other lending options. Additionally, be aware of the risks that come with your seller account acting as collateral for the loan and the conditions under which your account may go into default.

Frequently asked questions about the Amazon Lending program

Lastly, here are answers to some frequently asked questions about the Amazon Lending program.

Can you get more than one form of financing through Amazon Lending?

If you’re eligible for both an Amazon Lending term loan and a business credit line from Marcus, you’re allowed to get both at the same time. However, the Amazon Community Lending Term Loan and Parafin Merchant Cash Advance are excluded from the multi-financing offer.

What role does Parafin play in Amazon Lending?

Parafin is a fintech startup that was founded in 2020 in San Francisco, California. The company helps owners of marketplaces and POS platforms by offering capital as a service and is the provider of merchant cash advances for Amazon sellers.

What role does Marcus by Goldman Sachs play in Amazon Lending?

Marcus by Goldman Sachs is the online-only brand of Goldman Sachs Bank USA. While Goldman Sachs has over a century of experience in the banking industry, Marcus is a newer branch. It’s made a mark in the market by offering no-fee personal loans and high-yield savings accounts, It’s now also the provider of business lines of credit through the Amazon Lending program.

What is the Amazon Community Lending program?

The Amazon Community Lending program aims to provide affordable short-term financing to U.S. small businesses in rural and urban areas that are socially or economically distressed. For example, minority-owned businesses, low-to-moderate income communities, and other historically disadvantaged business owners. Invited sellers can complete their applications online with Lendistry. If approved, they can not only get an affordable short-term loan, but can also get one-on-one counseling, on-demand educational classes, and webinars.

What’s the best alternative to Amazon Lending?

There are a few alternatives worth considering. For starters, several other online platforms offer financing programs which are sales-based such as PayPal, Stripe, and Shopify. If you use any of those platforms, you may want to look into their offerings to see if you can get a better deal. Additionally, Payability is unique in that it’s sales-based but isn’t attached to a specific platform. To qualify, you’ll need $10,000 per month in sales on either Shopify, newegg, Walmart, or Amazon. You can simply link your account and see if you qualify.

Explore other e-commerce business financing options

Amazon’s not the only platform offering financing to e-commerce businesses. Here are a few others you may want to explore:

About the author

Jessica Walrack

Written by Jessica Walrack

Jessica Walrack is a personal and business finance writer who has written hundreds of articles over the past eight years about loans, insurance, banking, mortgages, credit cards, budgeting, and all things credit. Her work has appeared on Bankrate, The Simple Dollar, The Balance, MSN Money, and Supermoney, among other publications. Her love of a good number breakdown and passion for making complex concepts easy to understand makes writing about finance a natural fit.

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