Building a successful Amazon business requires careful planning and strategic investment. One of the most crucial decisions you’ll face is financing your venture. Whether you need funds to expand inventory, invest in marketing, or purchase new equipment, securing the right financing can be the key to unlocking growth. 

Amazon Lending is an option; but it’s important to understand that it’s not the only option—or the best one, depending on your situation. This article will explore Amazon Lending, a financing program offered directly by Amazon, and dive deep into five alternative funding sources to help you make an informed decision.

What is Amazon Lending?

For qualifying sellers, Amazon Lending offers a convenient financing solution directly through your Seller Central account. This program can provide a quick and potentially cost-effective way to fuel your business growth. It offers various types of loans, potentially helping you fuel your business growth without the lengthy application processes and credit checks often associated with traditional loans.

Amazon Lending offers various loan options, including:

  • Term loans: These one-time loans provide a fixed amount of capital that needs to be repaid with interest over a set period, typically ranging from 3 to 12 months.
  • Lines of credit: This flexible option allows you to access funds as needed, up to a pre-approved limit, with the flexibility to repay what you borrow over a specific timeframe.

So, how do you get started? It’s important to note that Amazon Lending operates as an invite-only program. If you meet its eligibility criteria based on your sales history and other factors, you’ll receive an invitation through email and/or a notification within your Seller Central account.

The application process is designed to be simple and streamlined, allowing you to apply online in minutes without the hassle of lengthy paperwork. Once approved, funds can be received within a few business days, providing a quick cash injection to fuel your business growth.

Advantages and Disadvantages of Amazon Lending

Amazon Lending is an advantageous program for sellers who qualify, and it can be a boon for building your ecommerce business. However, before applying, it’s important to have a clear understanding of the pros and cons of this program. Here’s what you need to know.

Advantages of Amazon Lending

For most sellers, the benefits of Amazon Lending have a lot to do with the integrated nature of the program. If you need funds to expand your Amazon business, getting them from Amazon itself and having the loan or line of credit directly connected to your seller account is convenient. Here’s a look at some of the other benefits to consider: 

  • Fast and Convenient: The streamlined application process and rapid access to funds make Amazon Lending a compelling option for sellers needing immediate financing.
  • No Credit Check (for some options): This feature is particularly beneficial for sellers with limited credit history or those seeking to avoid impacting their personal credit scores.
  • Potentially Lower Interest Rates: Compared to alternative options like merchant cash advances, Amazon Lending may offer competitive interest rates, especially for sellers with strong sales performance.
  • Automatic Deductions: Repayments automatically deducted from your Amazon sales simplify the repayment process and eliminate the risk of missed payments.
  • Focus on Seller Success: As Amazon has a vested interest in your success, they may offer flexible repayment terms and potentially revisit loan terms in the future.

Disadvantages of Amazon Lending

While Amazon Lending is quick and easy for qualified sellers, there are a few drawbacks to keep in mind. Pay attention to these shortcomings when weighing the decision to borrow from Amazon vs. a more traditional medium of business lending:

  • Limited Loan Amounts: Compared to traditional business loans, Amazon Lending offers smaller loan amounts, which may not be sufficient for significant business expansion plans.
  • Early Repayment Penalties: Certain loan types may impose penalties for early repayment, reducing your flexibility.
  • Repayment Tied to Sales: Reliant on your Amazon sales for repayment, this feature can be risky if your sales fluctuate or experience a downturn.
  • Limited Eligibility: Not all sellers receive invitations to participate in Amazon Lending, and eligibility criteria can be opaque.
  • Not Suitable for All Needs: Amazon Lending is primarily designed for business expenses related to your Amazon selling activities, excluding personal expenses or investments outside the platform.

While Amazon Lending offers advantages, it’s crucial to carefully weigh the potential limitations and ensure it aligns with your specific business needs and financial situation. Analyzing the alternatives explored in the next section will further empower you to make an informed decision.

5 Best Financing Alternatives to Amazon Lending

While certainly one of the most convenient options for business financing, Amazon Lending is far from the only option for sellers. If you’re looking to expand your inventory, invest in marketing, or grow your ecommerce business through an infusion of capital, consider exploring these five forms of traditional business financing:

1. Business Line of Credit

A business line of credit functions similarly to a credit card, offering a revolving credit limit you can draw on as needed. This provides flexibility for ongoing expenses or unexpected opportunities. However, be mindful of potentially higher interest rates and shorter repayment terms compared to other options.


  • Flexibility: Borrow only what you need, ideal for covering ongoing expenses or unexpected costs.
  • Potential for Lower Interest Rates: Compared to other options like merchant cash advances, lines of credit can offer lower interest rates, especially with good credit.


  • Shorter Repayment Terms: Repayment periods for lines of credit are typically shorter than term loans, requiring faster repayment.
  • Potential for Higher Interest Rates: Interest rates can vary depending on your creditworthiness and may be higher than some Amazon Lending options.

2. SBA Microloans

The U.S. Small Business Administration (SBA) offers microloans, a government-backed program specifically designed to support small businesses with loans typically ranging from $500 to $50,000. These loans often come with lower interest rates and flexible repayment terms, making them a suitable option for startups or businesses requiring smaller financing amounts.


  • Lower Interest Rates: Due to government backing, SBA microloans typically offer lower interest rates compared to traditional loans.
  • Technical Assistance: The SBA offers technical assistance programs to help small businesses succeed, including guidance on managing finances and growing their businesses.


  • Lengthy Application Process: Compared to Amazon Lending, applying for an SBA microloan can involve a more complex and time-consuming process.
  • Limited Eligibility: Specific eligibility criteria may restrict access to this program for some businesses.

3. Business Credit Cards

Business credit cards offer another financing option, allowing you to make purchases and access credit for business expenses. Responsible use of a business credit card can also help build your business credit score, which can benefit future financing endeavors. And, if your card comes with rewards, it’s a great way to earn extra incentives while you spend to expand your business.


  • Rewards Programs: Many business credit cards offer rewards programs that can benefit your business, such as cash back or travel points.
  • Building Business Credit: Responsible use of a business credit card can help establish and improve your business credit score, leading to better terms on future financing.


  • High Potential for Debt: If not managed carefully, business credit cards can lead to significant debt accumulation due to high interest rates.
  • Personal Liability: Unlike some other options, business credit card holders are personally liable for any outstanding debt.

4. Merchant Cash Advances (MCAs)

While not technically a form of financing, Merchant Cash Advances (MCAs) are nonetheless handy tools for getting a quick infusion of capital. MCAs provide immediate access to cash in exchange for a portion of your future sales. While convenient, they come with significant drawbacks and should be approached with caution.


  • Fast and Easy Approval: Unlike traditional loans, MCAs often have less stringent credit score requirements and quicker approval processes.
  • No Collateral Needed: Because they’re tied to a percentage of future sales, there’s no collateral needed to secure a MCA.


  • High Fees: MCAs typically involve high fees, often calculated as a factor rate, making the total cost of borrowing significantly higher than other options.
  • Unpredictable Repayments: Repayments are based on a percentage of sales, making cash flow unpredictable and potentially straining your business during slow periods.

5. Personal Loans

While not ideal for all situations, a personal loan can be a viable option for financing business needs, especially for established businesses with strong personal credit. Amazon sellers who don’t qualify for Amazon Lending may find themselves turning to personal loans. However, it’s crucial to prioritize business funding options before resorting to personal loans.


  • Potentially Lower Interest Rates: Depending on your creditworthiness, personal loans may offer competitive interest rates compared to some alternative financing options.
  • Fixed Repayment Terms: Consistent monthly payments can simplify budgeting and cash flow management.


  • Mixing Personal and Business Finances: Using personal finances to fund your business can blur lines and potentially impact your personal financial security.
  • Potential Tax Implications: Consult with a tax advisor to understand the potential tax implications of using a personal loan for business purposes.

Other Forms of Business Financing to Consider

The above list isn’t exhaustive, and numerous other financing options may be available depending on your specific circumstances. Some options may include:

  • Crowdfunding: This is a way to raise funds from a large number of people, typically through an online platform. It can be a good option for businesses with a unique product or service that can generate excitement among potential customers.
  • Angel Investors: These are wealthy individuals who invest in early-stage businesses. They can provide not only funding but also mentorship and guidance. However, angel investors typically only invest in businesses with high growth potential.
  • Venture Capital: This is a type of private equity financing that’s provided by professional investors to high-growth businesses. Venture capitalists typically invest larger sums of money than angel investors, but they also expect a higher return on their investment.
  • Inventory Financing: This type of financing allows you to purchase the inventory you need to sell your products. The inventory itself serves as collateral for the loan, so you may be able to qualify for a lower interest rate than with other types of financing.

Not sure what type of financing to pursue? Consulting with a financial advisor experienced in small businesses is highly recommended to explore all possibilities and ensure you choose the best option for your situation.

Kickstart Your eCommerce Business with NorthOne

Financing your Amazon business is a critical step towards achieving your entrepreneurial goals. While Amazon Lending offers a convenient option for eligible sellers, it’s crucial to understand its limitations and explore alternative financing sources to make an informed decision.

The best financing solution for your business often depends on your needs, financial situation, and risk tolerance. Carefully research each option, compare interest rates, fees, and repayment terms. Consulting with a financial advisor can be invaluable in navigating the financial landscape and choosing the most suitable path for your business success.

No matter if you choose Amazon Lending or a different type of business financing, NorthOne is here to help. To qualify for business loans, you need a business bank account and NorthOne is the ideal bank account for Amazon sellers. Apply for a NorthOne Connected Bank Account today and kickstart your journey on the path to success as a successful ecommerce seller!