Hi,
I used to borrow from Amazon Lending a few times years ago. Smooth transactions, low rate, and everything went well. Today I saw other lenders e.g. Uncapped, Slope, Parafin, etc and no Amazon Lending. Did Amazon stop the lending department? Have you guys ever tried other lenders? I’m curious whether they would be as good as Amazon Lending. Their interest rates are higher (10%-30%) compared to 6%-10% of Amazon Lending years ago. Also what would happen if the loan default? Amazon Lending would have taken over the inventory and sell on their platform to pay off the debt, but I don’t think these non-Amazon lenders could do it. It seems unsecured. Please share your thoughts and experiences. Thank you.
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Yes, it did end the direct involvement (i.e., with it’s own corporate assets on the hook) in the Amazon Lending Program back in Q1 of 2024.
Reports since that abandonment was announced seem to trend strongly towards the notion that the Third Party Providers it lined up to fill the void - perhaps MOST especially Parafin - are not pleasing to those 3P Sellers who’ve used them.
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The fintech industry is currently the major source of private lending for small business,
The banking industry is parking much of its money at the FED for risk-free earnings.
Business Development Companies are unable to find enough business borrowers who meet their standard and are willing to pay the current interest rates. The BDCs I am invested in are struggling due to too few borrowers.
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I, too, have used Amazon lending, typically once a year to stock up for the busy season. Amazon direct lending was the most seamless. In 2024, it was replaced with 3rd party options, so I went with SellersFi. My biggest complaint was that their draw would hit my bank 4 hours before Amazon’s deposit. A few months before the loan was paid off it was sold by SellersFi to Uncapped. Turns out I liked Uncapped better, so I went with them for the subsequent loan. They assigned me a rep who is helpful without being pushy and their draw on my bank happens the day after the deposit by Amazon. My goal is to get away from these annual loans, but they are helpful when inventory needs are growing.
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Yes it was replaced. We snuck in at the last moment and had one open well after they were “closed down” worked for us.
It was sad to see it go, it was easy, fast and fairly priced as that sort of thing goes. We started with $2K and ended up with six figure loans at its peak. It was a blessing to lose it. Should not have gotten hooked on it to start with.
My partner would always say, “The Crack Cocaine dealer has another offer.” Yes it is that addictive. I would never deal with a recommended third party. Through the decades we have been abused by such people trying to help. Not to say Amazon has not abused us, who here has not been?
I feel that the debt became to risky. I know of sellers that used it and went under, filed bankruptcy and evaporated. Amazon wanted they money bad, they even sent someone to collect it!
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