As an Amazon seller, you’re no stranger to payout delays and the cash flow issues they can cause. Without a reliable source of cash, you can’t reliably grow your business or navigate change. Fortunately, there are seemingly endless financing options for sellers — including Amazon- and eCommerce-specific solutions, traditional options, and more. Here, we outline five ways to finance your Amazon business so you can find the funding solution that’s right for you.
One option for your financing needs is a business credit card, which allows you to make investments on credit and, in many cases, earn cashback and other rewards on your purchases. If used responsibly — i.e. if you pay your balance in full and on time every month — you can avoid compounding interest payments.
The catch, of course, is that credit limits only go so far and you will be charged interest and/or fees if you carry a balance or miss payments.
If you decide to use credit cards for business investments, make sure you open a business credit account — not a personal credit card. That way, you can keep your business and personal finances separate and build business credit in the process.
Qualifying Amazon sellers have access to business loans and lines of credit through Amazon Lending, an invite-only financing program for top-tier Amazon sellers. Eligible sellers have access to loans up to $750,000 as well as the Marcus Business Line of Credit from Goldman Sachs.
Certain details about Amazon Lending are not publicly available — such as interest rates and minimum qualifications. That said, seller forums quote rates between 3% to 16.9% APR, and sellers with steady, growing sales and high customer satisfaction scores are likely to get offers.
If you qualify, you’ll get an offer in Seller Central. Keep in mind, however, that the offer is not a loan guarantee — rather, it is an invitation to apply. The application is online and decisions are typically made within five business days. If approved and funded, repayments are automatically deducted from your Amazon payouts.
All in all, Amazon Lending offers a lot of convenience for qualifying sellers — just remember that you can only apply if you see an offer in your account.
Payability Instant Access
Another convenient option for Amazon sellers is Payability, a financing company for eCommerce sellers that offers a variety of flexible solutions. One such solution is Instant Access, which gets you your Amazon payouts the next business day, every business day. What’s more, if you sell on other marketplaces like Walmart or Newegg, you’ll get those payouts in real-time as well.
Say, for example, you have $1,000 in your Amazon account on Monday. Normally, you’d have to wait at least two weeks to get it (less Amazon’s fees, of course). With Instant Access, you’ll get 80% of it on Tuesday. The remaining 20% is held to cover any returns or chargebacks but will be included in your next scheduled Amazon payout. To qualify, you must have at least three months of selling history and average monthly sales of $2,000.
If you’re looking for a large lump sum of cash, Payability offers that as well. Scroll down to learn about Instant Advance.
Payability Instant Advance
Payability’s Instant Advance is an advance on your future sales — up to $250,000 — which you could get in as fast as 24 hours. Use the funds to invest in bulk inventory orders, marketing campaigns, or other growth opportunities. To qualify, you must have a minimum of nine months selling history and average monthly sales of $10,000 on Amazon and other marketplaces ($2,000 minimum/month on Shopify).
More about Payability:
• Not a loan company: Payability is not a loan company. So you are not taking on debt or giving up equity in your company. Instant Access simply gives you access to your own revenue faster and an Instant Advance is a purchase of your future eCommerce sales. Learn more about the differences between loans and capital advances.
• No interest: You will never have to worry about compounding interest. Instead, Payability charges a flat fee for both Instant Access and Instant Advance and also offers prepayment benefits.
• No credit checks: Payability does not run credit checks. Decisions are based on your sales performance and overall account health.
• Simple online application: The application takes 10 minutes to complete and requires little to no paperwork. You could get a decision and funding in as fast as 24 hours.
• Multi-channel benefits: If you sell on other channels in addition to Amazon, Payability will factor in your entire eCommerce portfolio to maximize your daily payment and advance amounts.
Traditional Financing (SBA, term loans)
Of course, you could consider more traditional financing options like bank term loans or SBA loans. There are a variety of benefits to consider with traditional solutions like these. For example, loan amounts go up to $1 million, payment terms are long, and interest rates are low.
That said, the application and funding processes can take weeks (something months), require a lot of paperwork, depend a lot on your personal credit score, and often end with a no. In fact, approval rates for small and online businesses tend to be low. Your chances of getting approved increase if you have a successful Amazon business with years of operating history and a proven track record of growing sales. If this sounds like you — and if you don’t need financing right away — traditional financing might be a fit.
The good news is, there are a variety of financing options for Amazon and other eCommerce sellers. The key is to find the one that fits your needs and growth goals. As you consider your options, take note of why you need funding, when you need it, and even how many channels you sell on. This information can help you narrow down where you actually start applying.
Apply at go.payability.com/GETIDA and get a $250 sign-on bonus when you get funded. As mentioned above, there are no credit checks or obligations associated with applying.