Amazon are set to challenge traditional lending firms by offering loans to small business owners who sell their items through the online marketplace.
The initiative is run by Amazon Lending, and has so far only been available to small business owners in the United States and Japan. The service will extend to 8 more countries later this year, including the UK, France and Germany.
Amazon will offer funding to a select group of SMEs on an invite-only basis. Small businesses will pay back the loan through their own sales proceeds with the marketplace.
Amazon has offered millions in loans to small businesses since 2012. In the United States, Amazon currently offer loans ranging from $1000 – $600,000, primarily so merchants can buy stock to sell to their customers.
‘‘We know a lot about our sellers’ business and invite only those who we think are in the best position to take capital and grow,’’ commented Peter Faricy, head of Amazon Marketplace.