Amazon recently launched a new financing solution for small business sellers in the form of a merchant cash advance.
The advance is provided by Parafin, a US provider of growth capital for sellers, and gives sellers quick access to capital with transparent, capped rates, no fixed terms, no personal guarantees, no credit checks or paperwork. excessive, and without late fees.
It works by tying the cash advance payment to a portion of the seller’s future sales for a fixed capital fee.
Amazon launches Merchant Cash Advance program for small business sellers
Eligible businesses will be able to access capital ranging from $500 million to $10 million, enabling vendors to grow their business, protect margins, develop new products, increase inventory and effectively manage cash flow. Quick and easy access to capital is combined with a flexible payment schedule determined by a fixed percentage of the seller’s Gross Merchandise Sales (GMS) until the financing is repaid.
Expand the reach and capabilities of sellers
Amazon WW B2B Payments and Lending Director and General Manager Tai Koottatep said via a statement on the About Amazon press page: “Amazon is committed to providing convenient and flexible access to capital for our sellers, regardless of size. Today’s launch is another step in strengthening Amazon’s commitment to sellers and builds on the strong portfolio of financial solutions we already offer. This latest offering dramatically expands sellers’ reach and capabilities, and expands their access to capital in a flexible way, helping them control their cash flow and, by extension, their entire business. »
Parafin co-founder Vineet Goel explained why his company is providing the advances, saying, “We founded Parafin with a mission to grow small businesses, and we’re thrilled to have the opportunity to do so in providing Amazon sellers with this merchant cash advance option. It’s a privilege to count us among Amazon’s suite of financial solutions, and we look forward to making a difference for Amazon.com sellers looking to grow their business.
SMB Group partner Laurie McCabe added: “It can be difficult for small and medium-sized businesses to access capital, whether they are just starting up or are more established. What Amazon is doing in partnership with Parafin to provide quick access to capital in a convenient and transparent way – and that protects sellers during periods of low or no sales – matters to the industry. It will be exciting to see how Amazon sellers use this cash advance solution to help grow their businesses. »
How to Apply for an Amazon Merchant Cash Advance
Applying for the Merchant Cash Advance is quite simple. You must first log in to the Seller Central hub, then check the financing solutions your business is eligible for. If your business is eligible for Merchant Cash Advance, you will see the option card on your Seller Central homepage. Select it and choose the financing option that best suits your business, including the amount you want to request. The final steps to complete the application will then appear on the screen.
The program has already started rolling out to select US-based companies and is expected to be available to hundreds of thousands of eligible sellers by early 2023.
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