by James Hickson | March 11, 2022 | 12 min read
How to fund your Amazon business? A guide to Amazon seller loansGet funded
Last updated: September 21, 2022
As an e-merchant, you'll know that the highs and lows in sales can be unpredictable and affect your cash flow. The same holds true for members of the Amazon Business Seller programme.
Quick and reliable access to funding options can help your Amazon store overcome these challenges and help you grow your business, but finding it is far from easy.
Banks have strict criteria that work fine for traditional enterprises but can hold fast-moving online businesses back. For example, traditional lenders carry out intensive credit checks before approving business loans for Amazon or only lend to businesses with significant collateral.
If you have an Amazon store with a proven track record, you'd be better off looking for alternate funding that caters specifically to online stores and their very exact funding needs.
Table of contents
- Why do Amazon stores need a business loan?
- Why Amazon sellers may struggle to get a traditional small business loan
- Five alternative types of loans for Amazon sellers
- The best type of loan for your Amazon store
- What can Amazon seller loans be used for?
- Eligibility criteria for Amazon seller loans from Bloom
- How much does Amazon funding cost?
- How to apply for Bloom Amazon seller loans
- Why choose Bloom for an Amazon funding in the UK?
Why do Amazon stores need a business loan?
Amazon marketplace sellers might need capital to fund:
A business start-up
New businesses have a lot going on at any given time. Just setting up an Amazon store costs a considerable amount of money. Factor in the inventory costs, storage, seller fees, product research, advertising, promotion, and a range of other expenses. The chances are that you'll need £4,000 to £6,000 to jump-start your Amazon business.
That's why it's a good idea to have a ready source of Amazon seller funding locked down before you launch.
As your sales grow, you'll need an ever-increasing amount of working capital to engage and satisfy your growing clientele. This usually means investing in more inventory, the ensuing storage costs, greater advertising expenses and hiring new employees.
Paradoxically, it's only after your Amazon store starts to grow that you'll begin to face significant challenges to your cash flow. Many Amazon store owners find it much more challenging and cost-intensive to scale their operation than starting up the store. This requires working with a funding solutions provider that you can count on.
Even when Amazon businesses are profitable from the get-go, they need reliable funding options to finance typical ongoing business expenses — bank charges, utilities and so on.
It's no secret that sales often fluctuate, and so do selling prices. As a result, it can be difficult for a seller to maintain a stable cash flow. So, to keep the business steady and stable, Amazon sellers need a reliable funding solution.
Why Amazon sellers may struggle to get a traditional small business loan
Many first-time Amazon sellers approach banks for conventional loans, only to face disappointment. It can be tough to secure a traditional small business loan as a small business owner to launch or expand an Amazon business.
Banks do not give small business loans to Amazon sellers because of the following:
Lack of a traditional business plan
Absence of tax history
Inability to show past credit score
Failure to offer good collateral
Five alternative types of loans for Amazon sellers
If getting a bank loan can be next to impossible for Amazon businesses, where can small businesses go for funding ?
Here at Bloom, we offer market-leading funding solutions to new and existing Amazon sellers in the UK.
We are just one of several options for funding an Amazon store. Read about the five alternative types of funding available to Amazon stores and choose carefully, according to your business needs.
Peer-to-peer loans (P2P)
One source for Amazon funding is peer-to-peer funding , commonly known as P2P. In P2P lending, small business owners post the amount they want to borrow on a peer-to-peer business lending platform. They also specify the percentage of interest they can afford to pay. Every lender checks the request and bids on it. The highest bidder gets to lend you the amount you applied for.
This allows the application process to be completed by submitting your personal loan application to another company without the requirement of any bank approval. Therefore, your credit score will not be affected.
Pros: P2P is easy to apply for and can have low interest rates. All Amazon businesses can use a P2P funding system.
Cons: This loan system is risky and usually doesn't cover your total investment. Sellers need to provide their personal credit score and credit history.
Amazon offers sellers an online lending option which allows them to borrow working capital at rates generally below those for credit cards. In essence, Amazon loans are small business loans tailored for Amazon business owners, but the amount is less than a typical small business loan. However, it's available very quickly.
With Amazon lending, small business owners can borrow capital from Amazon on lower interest than they would pay to a bank.
Business owners need a solid online sales history and a firmly established business to qualify for this loan. Sellers submit their business loan applications for Amazon lending and, if eligible, they can acquire significant funding to invest in their business.
Pros: The loan amounts are transferred to the seller account very quickly, directly from Amazon.
Cons: You can only apply for an Amazon loan if your seller account shows a solid sales history.
Much like other short term loans and personal loans that are generally meant for personal spending, credit card debt is not an ideal way to acquire funding. With that said, it works as a last resort for those who can't get an Amazon loan.
Pros: Sellers can get a discount on their bank credit cards for short-term expenses.
Cons: Accessing funding via credit card has incredibly high interest rates.
Merchant cash advances (MCA)
With a Merchant Cash Advance, you receive a lump sum upfront and then pay it back with a percentage of your daily sales. However, merchant cash advances don't offer a fixed payment to sellers, making them unsecured loans. Eligible sellers must have a stable business. Their minimum annual revenue and business turnover must meet the requirements of the lender. In addition, their business must accept card payments.
Pros: Merchant cash advance loans don't have set interest rates.
Cons: The overall cost to borrow is still pretty expensive because the lender collects a fixed percentage of the daily balance.
Amazon seller loans by Bloom
Here at Bloom, we offer very attractive seller funding to Amazon stores. We make the application and approval process swift and easy. We can provide funding up to a maximum of £10 million.
Qualified sellers with an Amazon retail business can easily apply for our tailored funding solution. You simply complete an online application process on our website, and then we check whether you're eligible for our loan options, at what level, and on what terms. Finally, after all the requirements have been met, we transfer the funds directly to your seller account.
Pros: Bloom's repayment terms are based entirely on revenue. There are no monthly fees. So, if your sellers account health suffers a bit, or you have a poor sales month, the amount you repay will adjust to your monthly revenue.
Cons: The Amazon store has to be a year old and make at least £10K or more in monthly revenue to be eligible.
The best type of loan for your Amazon store
Bloom's Amazon lending program is available for every business owner registered on Amazon –it's eCommerce funding that also helps many business owners during the fluctuations of the Amazon sales market. This loan system brings maximum benefits from B2B transactions, quantity discounts, and VAT calculations.
Bloom provides lending services that are great for Amazon sellers and other merchants selling online. This is designed to sustain businesses through the ebb and flow of eCommerce.
This is essentially revenue-based financing, available at easy and agreeable terms for every online seller on Amazon. Here are the key features of Bloom's Amazon lending program:
Amazon seller loans ranging from £100,000 to £5 million
10% of daily sales as repayment
Fixed daily payment rate of 0.03%
No payment is deducted on off days — pay only for working business days
No interest rates
No hidden fees
No equity or dilution
No monthly payments
What can Amazon seller loans be used for?
There's a host of reasons why you might want to take advantage of Amazon seller loans from Bloom, including:
Steady and quick cash flow
Purchasing more stock or supplies
Supporting general growth
Covering unforeseen bills
Eligibility criteria for Amazon seller loans from Bloom
You need to fulfil Bloom's Amazon loan eligibility criteria. For this, you'll need:
At least £10K in monthly revenue
A store that has been live for a minimum of one year
To operate as an Amazon business
You can also calculate and finetune your eligibility on our website and find out if the funding applies to your business or not.
How much does Amazon funding cost?
Lenders have their own schedule of service charges and other costs applicable to Amazon funding.
But unlike them, Bloom has a very clear-cut system, with fair pricing. We only charges 0.03% daily. Also, our policy is to only charge for the days a business uses its capital to generate revenue.
How to apply for Bloom Amazon seller loans
Applying for a Bloom loan is very straightforward. The whole process is relatively easy. We understand that getting funding for your Amazon business is a daunting task, so we have simplified the entire process.
All you need to do is provide your credentials or book a call, and we will take business information from you. Then, if your business is eligible according to our eligibility criteria, we will discuss the specifications of your Amazon seller loan.
The whole process is designed to help you acquire funding.
Why choose Bloom for an Amazon funding in the UK?
Bloom has helped hundreds of small businesses to find their footing and expand their services across the globe. See for yourself what you'll get after approaching Bloom for an Amazon seller loan.
Fair terms: Bloom has reasonable and straightforward repayment terms for sellers. We don't believe in putting extra pressure on already struggling businesses.
100% equity: You retain 100% equity. So, succeeding in your cause depends only on your sales performance.
Flexible repayments: We provide you with an incredibly flexible repayment method. There are no deadlines for you to repay us. You can return the investment when your customers pay you and your revenue increases. No pressure!
Secure instant capital: You do not have to wait in line. We have an efficient team that rapidly processes every online application to provide funding within 24 hours. Submit your application in a few minutes, then wait 24 hours for a decision. The funds will be directly deposited in your account if you are accepted.
Apply for an Amazon seller loan today
There is no point waiting around when you can secure instant funding for your Amazon store and immediately procure fast-selling products. So, apply for an Amazon seller loan right now and get your business funding in just 24 hours.
What does Bloom do?
We help digital entrepreneurs and eCommerce businesses grow and establish their market value. We provide capital to these businesses to accelerate their momentum and payment solutions that help reduce cart abandonment.
We thrive on the success of your business. Our ideology is that we get paid when you get paid. So, you pay us back when customers buy your products and revenue appears in your seller account.
What type of funding does Bloom provide?
Bloom provides up to £10M in unsecured capital. This funding is procured through a revenue-sharing agreement. We have a friendly payback procedure – we consult with you to determine how much you can quickly repay. You pay us from the decided percentage of your daily credit and debit card sales.
We also charge a flat daily fee only on the days you utilise your capital. Therefore, you only pay for the funding you are actually using. This is what really sets us apart from traditional lenders. There's also no interest rate – pay us back early, and the daily fee will immediately cease.
What is the process of getting funding from Bloom?
Getting funding from us is an easy and uncomplicated process. Sign up for an account and check if you fulfil the eligibility criteria. Next, connect your sales, marketing, finance functions, as well as your bank account.
We will take 24 hours to review your online application and select the best funding option for your eCommerce business based on your bank statements. You will be asked to set up a direct debit mandate and sign the funding agreement if you agree with the selection. Finally, your funds will be transferred to your account.
What is the maximum funding amount Bloom offers?
We assess every case separately. It mainly depends on your business situation. But we will ensure that the funding amount will be sufficient for the current needs of your business.
Can I repay Bloom from my bank account?
Yes, you repay Bloom directly from your linked account by direct debit. The amount is calculated by multiplying the repayment rate in your contract with the sales collected through your online store. As your daily sales vary, the daily repayment will also vary daily. However, the direct debit process will repeat every day until you repay the whole amount.
James Hickson is the CEO and Founder of Bloom Financial Group, the winner of numerous industry awards – most recently recognized as FinTech CEO of the year as well as Payment Service of the year by AI Global Media.
Bloom is a European Fintech company focused on small to medium business lending. With their proprietary technology, Bloom offers e-commerce and retail brands access to revenue based funding (between 25,000 EUR and 3M EUR).