Amazon Providing Short-Term Loans To Merchants Through Lending Program

Amazon has launched a new service that gives merchants short-term loans to sell their products on Amazon.com.  Amazon sent detailed letters to merchants about the short-term loan program.  The new service is called Amazon Lending.

Amazon Lending’s loans can be used to “purchase inventory and increase your sales on Amazon.com.”  If a merchant is approved, the funds will be placed in their Amazon Seller account within five days.  They will have to pay a monthly fee.

Amazon collects around 99 cents per sale plus a percentage of each transaction if a merchant is selling less than 40 items or $40 per month plus a revenue share if they are selling more than that.  Several merchants were given an interest rate of 13%.  This type of program competes against Kabbage.