Technology

Amazon.com, Inc. (NASDAQ:AMZN) Has Stepped Up Lending To Third-Party Sellers On Its Site

Amazon.com, Inc. (NASDAQ:AMZN) has been playing a significant role in helping small businesses peddling merchandise grow their business. Through its program dubbed Amazon Lending, the online retailer says that in the last 12 months, spent more than $3 billion in the expansion of these businesses. Since its inauguration in 2011, the program has pushed forward close to 20,000 merchants who have been trading on Amazon’s website.

The businesses get loans amounting to a range of between $1,000 and $750,000. Apparently, half of the businesses have taken second loans, which means they have been benefiting from them. However, it is not clear how much interest the loan attracts even though word has it that they have a comparable to credit cards and other alternative financing methods.

Traditional lenders shied away from small merchants

Amazon has been issuing these loans to sellers in the United States, United Kingdom, and Japan. The opening came about after the 2008 financial crisis, which pushed traditional lenders away from dealing with small merchants. However, Amazon’s loan program is by invitation only.

To identify those who are eligible, the company mines data from more than two million active sellers on the website. The VP for Amazon Marketplace, Peeyush Nahar also says that the company has lots of up-to-the-minute information about sellers, which helps them pick on those who are worth the credit.

But rivals are also doubling down on their marketplace businesses

Amazon is expectant of expanding to other countries the likes of down on their marketplace businesses where it operates its marketplaces. Nahar says, “We know that an infusion of capital at the right moment can put a small business on the path to even greater success.”

However, the Seattle-based e-commerce giant must embrace competition from the likes of eBay Inc (NASDAQ:EBAY) and Wal-Mart Stores Inc (NYSE:WMT) stores, which are also upping their game in marketplace businesses. Nonetheless, it could still be having an upper hand because the rivals are not offering loans.

It is worth noting that Amazon is not only a bookseller but most recently it also became a grocer. In the meantime, Amazons stock closed at $1,010.27 witnessing an increase of $0.20 or 0.02%.

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