The holiday season is just around the corner, and Amazon resellers are in an excellent position to make sales this year. However, a consistent limiting factor for small businesses doing e-commerce is the lack of reliable funding to attain inventory. What these businesses need are Amazon business loans.
Amazon business loans are a lending solution that allows resellers to purchase equipment for their e-commerce inventories. While these loans are always available, they have the most significant impact during the fourth quarter of any year, when holiday shopping trends take off. It’s possible to acquire Amazon business loans directly through Amazon. However, this method is often challenging and limits your options. Much more flexible lending options are short-term loans from an independent lender or Amazon inventory financing.
With consumers getting ready for the holiday shopping season, now is the best time for resellers to stock up on inventory. Read on to learn what Amazon business loans are, why they are so effective at the end of each year, and what your best financing options are as a reseller.
What is an Amazon Business Loan?
An Amazon business loan is any loan that provides liquidity to purchase equipment. The primary purpose of these loans is to allow online resellers to purchase equipment ahead of sales. In general, the majority of these loans go to Amazon resellers. However, with the advent of e-commerce and reseller programs such as Walmart’s Seller Center, these loans apply to virtually any reseller or e-commerce business.
Two ways to get Amazon business loans are through Amazon or an independent lender. Amazon offers a lending program for select resellers that provides general short-term loans. These loans can only be spent on inventory for Amazon sales, the loan terms are hidden, and businesses can only apply if selected by Amazon.
A much more flexible option is loaning through an independent lender. You can get virtually the same terms as a loan through Amazon’s lending program without the harsh conditions or limited information going in. Not only can you get a short-term loan for inventory acquisition, but you can also apply for Amazon inventory financing.
Amazon inventory financing is a lending solution for resellers that finances a business’s inventory value. The company then has funds to purchase equipment, or any other business expense, while paying off the loan with inventory sales. While this lending option is specific to online resellers, it has the most significant impact near the end of each year.
Is Amazon Business Loans More Effective During the Holidays?
Amazon business loans and any financing solution for online resellers have the greatest impact during the fourth quarter of each year. This timeframe is collectively known as “the holidays” and doubly features increased advertising for every sector and an expectation for consumers to spend during this period.
There are many reasons for consumers to buy during the holidays, including the following holidays:
- Black Friday
- Cyber Monday
- Super Saturday (before Christmas)
- Boxing Day (after Christmas)
- New Years
Additionally, there are the following incentives to spend more in the fourth quarter than in the previous three:
- Mega sales for each related holiday
- Heavy advertising (compared to other times of the year)
- Holiday bonuses and extra income
- Collective buying practices and the general expectation to spend
Overall, there are not only incentives to spend in the form of increased income and retail sales, but it’s also a collective practice in the U.S. to do so. These factors, in tandem, provide the heaviest sales traffic for every industry, especially in e-commerce.
Savvy e-commerce businesses can take advantage of the increased holiday sales trend by stocking up on inventory ahead of the season. The best way to do so is with suitable Amazon business loans.
What are the Best Amazon Business Loan Options?
You want to choose the best option when considering Amazon business loans to supplement your e-commerce business. In other words, you want the best terms and flexibility available for your goal: purchasing inventory your business will sell online.
For Amazon resellers, there are several options, including the Amazon lending program, general short-term loans, and Amazon inventory financing. We will look at each option in-depth with their associated pros and cons.
Amazon Lending Program
The Amazon lending program is a financing option offered by Amazon to its participant resellers. Amazon selects resellers that meet its criteria and offers short-term loans, lines of credit, or merchant cash advances for their business. Generally, the criteria to meet Amazon requires that a lender has a proven record of sales growth and is in good standing with Amazon. Positive reviews on your Amazon business mostly represent good standing.
Amazon’s lending program provides the following financing solutions:
- Loans between $1,000 to $750,000
- Term loans at 3, 6, 9, and 12 months
- The option between term loans, lines of credit, or merchant cash advances
While the Amazon lending program exists for Amazon resellers, it isn’t easy to apply for and is not the best option for newer resellers. Additionally, the lending program features the following disadvantages:
- Ambiguous and often steep terms with their loans
- Funds can only be used toward Amazon’s inventory
- Fixed monthly payments with harsh penalties for late payments
Overall, the Amazon lending program is an appropriate option if you qualify. However, it’s limited in flexibility and obscure with its terms. You can get much better financing with a general short-term loan or Amazon inventory financing.
Another option for an Amazon reseller is simply applying for a general short-term loan through an independent lender.
This option is essentially the same as going through Amazon. However, it has several notable advantages:
- Quick application process
- Flexibility in spending options
- Clear and predictable terms
- It can be used in any e-commerce marketplace, not just Amazon
Choosing a short-term loan over financing options through Amazon offers advantages in flexibility and clarity of terms. Rather than wait for Amazon to contact you and be forced into their terms, you can apply for loans and spend those funds however you need for your business. This option is best for businesses that need to meet expenses outside of inventory and balance their sales between Amazon and other e-commerce marketplaces, such as Walmart’s seller central.
For businesses that desire specificity over flexibility and want only to purchase inventory, BitX’s inventory financing is the most robust option.
BitX Inventory Financing
BitX Funding offers Amazon inventory financing as a lending solution for Amazon resellers. This option is a cost-effective way to leverage extra equipment ahead of upcoming sales.
It works because BitX finances the current value of your equipment or inventory and provides liquidity to match that value. Then, you have readily available funds to purchase equipment, meet overhead, or use it towards other business expenses. When you make sales from the equipment, you pay back the loan.
The best part is that inventory financing provides a line of credit, not a lump sum. You can draw from the line as you need and only pay back what you borrow.
Overall, inventory financing provides the following advantages to borrowers:
- Up to $10 million in financing
- An open line of credit rather than a term loan
- Specificity for resellers with extensive inventories
- Flexibility in how you spend the liquidity
- Generous terms
- Easy application with quick approval
For Amazon resellers, BitX’s Amazon inventory financing is the premium lending solution and one of the best ways to grow your business this holiday season.
Get Funded for Your Amazon Business Today With BitX Funding
The holidays are on their way, and shoppers nationwide are gearing up to spend this season. For businesses with e-commerce, now is the best time of the year to make sales and grow their business. However, suitable funding limits these businesses. The best way to take advantage of seasonal trends and guarantee sales during the holidays is with Amazon business loans.
Amazon business loans are a lending solution that helps resellers purchase inventory ahead of sales. While there’s the Amazon lending program, terms are obscure, and it’s difficult for new resellers to apply. The best financing options are short-term loans through an independent lender or Amazon inventory financing. If you’re a small business reseller who wants to boost their business ahead of a busy holiday season, contact BitX Funding today to discover the best financial solutions.
Published by Chris Davies, Creative Copywriter at The Labate Group in Westport, CT.