E-commerce sellers on the Amazon marketplace have many loan products to choose from. The Amazon Lending Program is a top consideration, given the option is exclusive to Amazon sellers. If you qualify for the loan, Amazon will send an invitation, allowing you to apply directly through your seller account. The ALP is an invitation-only loan designed for funding your Amazon inventory. Sellers can find several other Amazon loan products with fewer restrictions.
Amazon Loan Application Requirements
Each loan product available for Amazon e-commerce sellers has unique requirements. The Amazon Lending Program requires an invitation from Amazon, which is possible after meeting various eligibility conditions. Merchant cash advance (MCA), business term loans, personal loans, lines of credit loans, and P2P also feature specific requirements. Here’s the information you need when applying for different Amazon loan products:
1. The Amazon Lending Program Requirements
Ecommerce sellers with an Amazon Seller Account have a unique chance to apply for a loan through the Amazon Lending Program. The company offers loans starting from $1000. You must be active on the Amazon marketplace to receive a loan. Amazon will contact you directly through the seller account, inviting you to participate in the lending program. You need the following information for ALP loans:
• Amazon Seller Account: Only sellers with an account can be invited to the loan. To apply for an account, you must provide business information, email address, credit card, phone number, tax ID, and state tax ID.
• Sales Threshold: The business must meet a gross sales threshold. Your store must operate for at least 12 months with proof of sales and bank deposits.
• Excellent Customer Metrics: Amazon only loans stores with excellent customer metrics, including high customer satisfaction reviews. Too many negative reviews and complaints will keep you from getting invited for the loan.
• Marketplace Guidelines Compliance: To qualify for a loan, you must comply with all the seller guidelines provided by Amazon. If your store is found in violation, you may lose the seller account and won’t get a loan.
• Copyright & Trademark Infringements: Amazon will review copyright and trademark infringements reported over the past year. You should clear all copyrights and trademarks to avoid being flagged for violation.
2. Merchant Cash Advance (MCA) Requirements
A merchant cash advance loan is a popular product for e-commerce sellers. The loan offers a lump sum amount with a fixed interest rate. Your lender will deduct the loan plus interest from future credit and debit card sales. The loan amount issued depends on the volume of your card sales (future receivables). Most lenders partner with the point of sales provider to accurately determine the credit card data. Here’s the information you need when applying for MCA loans:
• Valid personal information
• Business information and KYC documents
• Completed application form
• Sales and bank statements
• Credit card statements
3. Business Term Loan Requirements
Amazon sellers looking for a loan can apply for a business term loan, available to small businesses in all sectors. The product is provided by banks, Fintech lenders, NBFC, and credit companies. Each lender has unique requirements, with some offering online applications, sanctions, and disbursal. Business term loans feature varying interests, tenure, processing fees, and repayment schedules. Lenders perform hard credit checks. Here’s what you’ll need:
• An excellent credit score
• Personal and business information
• Sales and bank statements
• Properly filled out the online application form
• Digital copies of all requested documents
4. Personal Loan Requirements
E-commerce sellers can qualify for personal loans from banks, online lenders, and credit companies. The loan is awarded based on individual qualifications and creditworthiness. Most lenders will review your credit score, assets, debts, income statements, and other details. The loan limits are usually lower than what you get with business loans. Here’s what to know about applying for personal loans for your Amazon business:
• An excellent personal credit score
• Valid personal and financial information
• Income statements for at least a year
• Asset details in case of collateralized loans
Other Amazon Seller Loans & Requirements
Amazon sellers have many other lending options, including credit card loans, peer-to-peer loans, and factoring. You can take a loan from your business credit card and use it to finance your Amazon store. Line of credit loans aren’t recommended because they carry higher interests. Peer-to-Peer loans are popular and involve pitching your business to lenders through a P2P platform.
Most lenders loan to e-commerce sellers with excellent credit scores, valid personal and business information, and proof of income or bank statements. Before applying for a loan, you should review the lending terms, including interest rates, lump-sum amount, and repayment schedule. Other aspects include late repayment fees and disbursal timeframe. Note that each lender has unique requirements for their products.
The Best Amazon Loan Product for eCommerce Sellers
Amazon eCommerce sellers have various loan products, starting with the lending program. If the ALP loans are insufficient, you can consider other business loans. Finding an Amazon loan is easy online. Many banks, reputable lenders, and credit companies are ready to offer secured and unsecured loans.