Amazon is quietly entering banks' territory by offering lending facilities. It lent more than $1bn in small loans to sellers in 2011 to 2015, compared with more than $1.5bn, which it lent from the past 12 months, said Peeyush Nahar of Amazon Marketplace. Over 20,000 small businesses have borrowed money from Amazon, with over half of those taking a second loan from the company. The loans are proving to be increasingly lucrative for Amazon because it takes a cut of transactions on its site and many merchants use the invitation-only loans to boost inventory or discount items. Interest rates are between 6% and 14%, according to sellers.
Amazon is quietly entering banks' territory by offering lending facilities. It lent more than $1bn in small loans to sellers in the past 12 months, compared with more than $1.5bn, which it lent from 2011 to 2015, said Peeyush Nahar of Amazon Marketplace. Over 20,000 small businesses have borrowed money from Amazon, with over half of those taking a second loan from the company. The loans are proving to be increasingly lucrative for Amazon because it takes a cut of transactions on its site and many merchants use the invitation-only loans to boost inventory or discount items. Interest rates are between 6% and 14%, according to sellers.