7 Amazon Seller Loan and Lending Options for Small Business Owners


Want help with your bookkeeping? We make it easy. Get started, Speak w/ a Founder, or Schedule a Callback

A neon sign that says money to loam.


You may want to apply for an Amazon seller loan at some point in your selling journey. Being an Amazon seller isn’t always easy, especially when you’re just starting out. A loan can be very helpful, and we know of several ways to borrow money for a storefront. 


In this post, we’ll first go over what these loans are and the benefits of getting one. Then we’ll give examples of some types of loans you can choose from.


What is an Amazon Seller Loan?


In general, what we consider to be an Amazon seller loan is a financing option for Amazon sellers. This loan can provide capital for the purposes of opening a store. It can also serve as an infusion to keep a store running until it becomes profitable. 


These days, Amazon sellers have multiple options when considering taking out a loan. The most common are lines of credit and term loans. 


A line of credit offers you a certain fixed amount of money. You can dip into this preset amount at any time that you have need of some money. You cannot borrow more than the limit. If you have an open line of credit, you can make repayments to replenish the amount. This means you can borrow again, subject to the same limit. Borrowers will usually get a line of credit from a bank, though some other financial institutions also offer this. 


A term loan is an upfront cash loan given to the borrower all at once under specific terms. Usually, only established businesses can get term loans because they can prove that they are financially sound. A new business would have difficulty securing this type of loan. The lender and the borrower agree on a set repayment schedule, and the interest rate can be fixed or floating. Usually, the lender will ask for a larger down payment early on in the repayment schedule. This makes later payments smaller and the interest lighter so the total amount isn’t too hard to pay back.


Benefits of an Amazon Seller Loan


A loan is a fast way to get the money you need to start or revive an Amazon business. Many sellers also take out loans to help with their expansion plans. If you have a good business plan, a loan can be a good idea to speed up your journey to bigger profits. In the long run, you can easily make more than you pay back as opposed to waiting. That is, if you manage your loans and timelines properly. If you’re not sure about your plan or your discipline, you might consider saving money rather than borrowing. This way, you can still run your business but avoid the risk of unpayable debt.


That said, a loan can help take care of operating expenses for a new business. The infusion can help increase sales to make the business profitable more quickly. It can also help an existing business grow faster. Most Amazon sellers think about taking out loans at some point. This is mostly because online businesses have long and irregular cash cycles. On Amazon, sellers get their money on a 14-day cycle for the most part. They also usually have either Net 60 or Net 30 payment terms with their inventory suppliers. This means that cash flow is not too easy, which extends the cash cycle. Some financing can make things go more smoothly by closing this gap between revenue and payment. It can also speed up the cash flow cycle.


Apart from regular operations, marketing expenses can be heavy on the budget. Without a proper investment in marketing activities, however, your business can suffer. At the very least, it will not grow as fast. You can use a loan to speed up the growth process to boost profits. If you do it properly, you can easily cover the repayments plus interest and then some. Loans can also help increase profits by giving you the ability to purchase more inventory. 


A calculator next to financial documents. amazon seller loan


1. Amazon Lending


Amazon Lending is an invite-only program. Eligible US-based Amazon sellers can get financing through this program within minutes. Because Amazon pre-vets these sellers, they don’t need to provide a lot of paperwork or go through long processes to get approval.  If you can provide clear proof when Amazon asks, you can get approved within five business days. 


Sellers who qualify still need to apply, since they need to take a few steps before the loan is approved. No seller can know what the particular lending criteria is. However, you can expect to have to maintain impressive sales volume, excellent customer metrics, and have a selling history of at least 12 months. 


Amazon offers short-term loans of up to $750,000 and payment terms up to 12 months. Interest rates range from 3% to 16.9% per annum. These loans outline certain restrictions in how sellers can use the money. Mainly, you can use Amazon Lending loans to buy inventory to sell on Amazon and to invest in new products and promotions. 


Amazon automatically deducts loan repayments from your payouts that come right after the payment is due. If you don’t have enough there to cover it, Amazon will take the outstanding amount from the next payout. You do not need to pay any origination fees or repayment penalties. You can also reduce interest charges if you pay the loan back early. 


2. Traditional Bank Loans


Because eCommerce businesses have inherent cash flow issues, most banks are hesitant to lend to them. This includes Amazon, even though this is the largest online marketplace and extremely profitable. In addition, most banks are not sure how to deal with Amazon seller loans where the business owner has no physical collateral. Banks are hesitant even with sellers who have a proven track record of great sales over several years. 


An Amazon business will usually need to borrow less than $100,000. Most banks don’t want to deal with such small loans. They make more money lending larger sums. 


Amazon sellers can still get traditional bank loans, though. It may be more difficult and the lending agreement more complex. If you prepare what they want to see, it can help. Banks have standard metrics that reveal credit risks and potential to default on a loan. If you can present documents that show the bank you are good for the money, they will more easily agree that it makes sense to lend to you. 


Financial Income Economic Diagram Money Concept amazon seller loan


3. SBA Loans for Amazon Sellers


SBA is the US Small Business Administration. They offer microloans for startups and business expansion. SBA funds go to designated approved intermediary lenders through which qualified businesses can borrow. These lenders cater to sellers who can’t get traditional bank loans. Note that sellers can’t use SBA loans to pay off existing debts or buy real estate. 


Sellers can borrow as little as $500 up to $50,000 provided they meet the criteria. First, the business bust be for-profit. Sellers must also prove that they have no bankruptcies or foreclosures within the last two years. Most sellers don’t need to meet any minimum personal credit score requirement. Apart from these basics, different lenders can have their own requirements, such as collateral and a personal guarantee.


The maximum repayment term is 6 years. Annual payment interest rates range from 8% to 13%, depending on which microlender you are dealing with. 


To apply for an SBA loan, prepare your written business plan and personal financial statements. Get copies of your business’s licenses and permits, too. Write out a personal guarantee if you do not have any collateral to offer. Once this is ready, you will typically wait from a few weeks to months to get an application through. 


Other microloan options are also available. You can find many online. Be careful when choosing one to make sure they are legitimate and safe.


4. Flexible Online Amazon Seller Loan 


Online lenders provide more flexible options that can be great for eCommerce businesses. Different lenders offer different terms, rates, and fees. You need to carefully comb through each offer carefully to find the one that gives you the best deal. Here are some factors to check:


  • Easy application process
  • No hassles over credit scores
  • No personal or corporate guarantees
  • Competitive and transparent rates
  • Revenue-based financing 
  • Flexible repayment terms
  • Revenue-based financing available or reasonable annual income requirements 
  • Fast processing of applications and release of funding 
  • Approval for new businesses (if this applies to you)
  • Early payment discounts
  • No prepayment penalties or closing fees
  • No hidden costs
  • Can borrow more with positive repayment record
  • Dedicated account representative
  • Free accounting tools


A hand holding bitcoin above cash on a table. amazon seller loan


5. Peer-to-Peer Lending


Peer-to-peer (P2P) lending lets sellers borrow from individuals rather than financial institutions or other middlemen. We see many more P2P lending websites than over the past several years. This attractive alternative method of financing is also known as “social lending” or “crowd lending.” It began in 2005 and has become very popular as a form of Amazon seller loan.


The key aspect of P2P lending is that the facilitating websites connect borrowers and investors directly. Both parties have to abide by the rates and terms set by the website. These sites basically provide the platform to complete transactions. Lenders are usually individuals who want to go for better potential returns on their savings than a bank will offer. Borrowers are usually those who are not eligible for traditional bank loans. Note that P2P loan rates are generally much higher than what traditional financing options offer.


6. Credit Lines for Amazon Sellers


Through Amazon, sellers can apply for lines of credit from Goldman Sachs. The Marcus Business Line of Credit is available to US Amazon sellers. Because the company created it specifically for Amazon sellers, it works quite well. This is best for sellers who want access to funds when needed rather than committing to a big lump sum.


Like Amazon Loans, this program is invitation-only, and the average seller doesn’t have access to much information about it. We do know, however, that this option has fewer restrictions on how you can use the money. For example, you can use it to pay staff, cover operations costs, and for product development and manufacturing.


If you qualify, you will see a notification in your Seller Central account. Eligible sellers can get up to $1 million in revolving credit, meaning you use it as needed and pay it off as you go. Marcus credit annual percentage rates range from 6.99% to 20.99%. 


If you want to apply, you will go to Marcus’ website for verification. Amazon shares data to confirm your eligibility with Goldman Sachs. The company uses your business revenue data to underwrite the line of credit. Most sellers get an answer within minutes. Note that you will pay a maintenance if you don’t use at least 30% of the credit line. You will also pay late-payment fees, unlike with Amazon Loans.


Of course, many other lines of credit are available to Amazon sellers. You can apply for these through banks, other financial institutions, and eCommerce-specific lending companies. The basics are the same, but each institution will have its own detailed requirements. 


7. Personal Savings and Bootstrapping


You can certainly use your personal savings to fund your Amazon business. If you want to launch your business with at least a little bit of capital, you can bootstrap it. This means that you will use your own money, which can be very risky. If you lose your money, you don’t have a backup. This ensures that you are debt-free, however. You maintain an impeccable credit score this way, which leaves investment and loans open to you as future options.


What Is EcomBalance? 



EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, Ebay, Etsy, WooCommerce, & other eCommerce channels.


We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.


You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.


Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.


And here’s some free resources:





Consider your goal for borrowing money before you decide to take out an Amazon seller loan. If you are a small business, any borrowing activity should be revenue-generating. For example, you should be thinking about purchasing inventory, maybe to take advantage of a seasonal bulk deal. You can also borrow for marketing campaigns and advertising or to launch an expansion program.


Be sure to do your research before applying for a loan. Not all loans are the same, and you want to pick the right one for your business. Your situation will be different from other sellers, so you must consider each option carefully. It’s ok to get advice from other sellers, but check to see if their needs are the same as yours. 


Want bookkeeping off your plate? We’ve got you! Get started, Speak w/ a Founder, or Schedule a Callback

Recent Posts

Julia Valdez

Julia Valdez

Julia Valdez is Freelance Writer and Agency Owner. She regularly writes on topics related to Business Finances, Growth, Hiring, Entrepreneurship, and more.

Avoid the Most Common Ecommerce Bookkeeping Mistakes

Get step-by-step processes to avoid 10 common eCommerce bookkeeping mistakes.

Leave a comment

Your email address will not be published. Required fields are marked *

Exclusive finance guide

Want better bookkeeping?

It's possible! Subscribe below & we'll send you our Bookkeeping Packet. A pack of resources to teach you about bookkeeping.

You’ll get our Ecommerce Bookkeeping Guide, The 10 Ecommerce Bookkeeping Mistakes Ebook, our Monthly Finance Meeting Agenda, & a few surprises!