Amazon Launches Merchant Cash Advance Sales Based Lending

Liz Morton
Liz Morton


Amazon is launching Merchant Cash Advance, a sales based working capital loan option to US sellers in partnership with Parafin.

Amazon Launches New Merchant Cash Advance Program Provided by Parafin, Doubling Down on Its Support for Small- and Medium-Sized Businesses
Today, Amazon (NASDAQ: AMZN) launched a new financing solution, a merchant cash advance, provided by Parafin–a U.S.-based provider of growth capital f

SEATTLE--(BUSINESS WIRE)--Today, Amazon (NASDAQ: AMZN) launched a new financing solution, a merchant cash advance, provided by Parafin–a U.S.-based provider of growth capital for sellers. This secure financing option ties payment on the cash advance to a portion of sellers’ future sales for a fixed capital fee and provides eligible Amazon sellers with easy and quick access to capital when they need it, paired with flexible payment plans.

With this program, sellers can access capital in a matter of days with transparent and capped rates, no fixed term, no personal guarantee, no credit checks or excessive paperwork, and no late fees. The program rolls out to some U.S.-based businesses today, and it will be available to hundreds of thousands of eligible sellers by early 2023.

This new merchant cash advance, through which eligible businesses can access capital from $500 up to $10 million, provides sellers with financing opportunities to expand their businesses, protect margins, develop new products, grow inventory, and efficiently manage cashflow. A flexible payment schedule is determined by a fixed percentage of the seller’s Gross Merchandise Sales (GMS) until the funding is paid off, with no minimum payments, no interest (only a fixed capital fee), and no collateral required—unlike a traditional loan.

Payments are only required during periods that a seller has made sales, and the fixed payment rate ultimately protects them during periods of slow or no sales. This financing option will provide sellers that have been selling on for at least three months with an additional solution for their financial needs alongside the existing financing solutions portfolio of term loans, interest only loans, and lines of credit provided by Amazon and its third-party financing partners.

More info:

Amazon Lending
Working capital loans designed with your business needs in mind.

It will be interesting to see what this new offering from Amazon will do to 3rd party ecommerce cash advance businesses like Payability.

Competitor eBay has introduced similar sales based working capital loan products in the UK and Germany.

eBay Germany Introduces Flexi-Kapital Loans By Iwoca
eBay partners with Iwoca to offer Flexi-Kapital working capital loans to sellers on its German marketplace.

US based eBay sellers have been clamoring for such a product ever since the split with PayPal made them no longer eligible for PayPal's sales based working capital loans, but so far they have not given sellers any indication there are plans to bring such an offering to the US market any time soon.

eBay Seller Capital October Community Chat
Sellers showed up to the eBay community chat with questions about Seller Capital, but eBay forgot to bring the answers.

Will you use Amazon Merchant Cash Advance? Let us know in the comments below!

AmazonFees & Payments

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Liz Morton is a seasoned ecommerce pro with 17 years of online marketplace sales experience, providing commentary, analysis & news about eBay, Etsy, Amazon, Shopify & more at Value Added Resource!