At the height of the pandemic last year, over two billion people turned to online shopping for their needs, generating significant sums of cash. E-commerce platform giant Amazon attracts more sellers from all corners of the world than any other channel. Estimates put the total number of Amazon sellers at over 9.7 million globally. If you’re one of them, you’re likely wondering how you can expand your business.
It may be hard to secure financing in traditional institutions as an Amazon seller. Below, you’ll find points on how to increase your chances of getting approved for additional funding as an Amazon merchant.
Study Your Options
There are numerous financing platforms where you can get a loan for Amazon business. Perform due diligence by checking each of these options, including the eligibility requirements and interest rates.
Before choosing which one appeals to your business, consider whether your online venture meets the qualifications. Take note that each of the financing options has different requirements. Generally speaking, though, your business will have better chances of getting approved if:
- Your Amazon business has been performing well
- You have a good credit score
- Your e-commerce store is in good standing
- Lenders’ conditions for fund use meets your specific business needs
- You have no severe customer service complaints
- You don’t have trademark or copyright violations
- You know how to prevent cart abandonments
Some financing apps impose more stringent rules than others in terms of sales figures and operations history. For instance, some financing channels may require your online business to have been existing for at least six months while other lending firms have a one-year minimum requirement.
2. How To Get Approved For Amazon Lending.
Amazon lending is a short-term financing program administered by the company itself. As a short-term financing scheme, the e-commerce giant expects sellers to repay within one year. Depending on your needs and the company’s assessment, a seller can borrow from USD$1,000 to USD$750,000.
You’d have better chances of getting additional financing if you possess the following:
- Pre-approval notice from Amazon
- Favorable sales performance
- Have been an Amazon seller for more than one year, with total sales of at least USD$10,000
- With good customer satisfaction ratings and have not received severe customer complaints
- No pending copyright or trademark violations and have been compliant with listing guidelines
- Agree to spend the loan only for inventory enhancement
The good thing about this non-traditional lending option is your business income documents and credit scores aren’t included in the assessment. Sellers with the approved loan will receive the amount within five days. Amazon will deduct the monthly payments directly from the seller’s account.
3. How To Get Approved For SellersFunding.
If you need additional financing for the other aspects of your business, consider third-party lending solutions such as SellersFunding. The app offers short-term and long-term loans for all qualified Amazon sellers. Loan amounts range from USD$1,000,000 to USD$5,000,000.
You may get approved swiftly if you meet the following requirements:
- Your Amazon store has been around for more than six months
- You have net sales of at least USD$20,000 in the past three months
- Your Amazon store is in good standing
The points above are the minimum qualifying requirements. The company will conduct a further evaluation before approval. Thus, it’s in the best interest of your business to exceed the status mentioned earlier.
4. How You May Qualify For Amazon Line Of Credit.
A line of credit works like a credit card for your business, which means you can rely on this option for various needs as an Amazon online seller. If you need additional funds for business needs other than expanding your inventory, this may be the better option for you.
Amazon has partnered with an international banking firm to offer this financing option, which gives Amazon sellers the flexibility to seek financial boost according to the seller’s needs. Loan amounts may range from USD$5,000 to USD$5,000,000, and there are different terms and requirements depending on the amount involved.
You’ll increase your chances of getting approved if you meet the following minimum conditions:
- An invitation link from Amazon
- An Amazon store existing for at least one year
- Minimum annual revenue of USD$50,000
- Agree to go through an assessment done by Amazon partner bank
This lending solution is a perfect fit for Amazon sellers looking to secure a fund boost only when they need it. With this option, a business avoids paying for hefty interest rates and potential misspending associated with receiving a lump sum amount.
Final Thoughts.
While different lending options demand various pre-qualifications, it helps keep your Amazon business status in an overall great position. Apart from setting your sights on selling, get your online store in order and manage your cash flow better. Most importantly, identify your business expansion goals and potential before applying for a financial boost from any of the available options.
