Financing For Small Amazon Sellers
- AccrueMe Team
- Nov 2, 2022
- 2 min read
As you grow your Amazon business to at least $10k per month in sales, specialty options of Financing for Small Amazon Sellers start to become available. While at this stage you won't be offered the best financing terms (in fact, you might be offered plain awful financing terms), you will start to have a lot more options than a start-up funding for Amazon Sellers including;
Factoring is a popular method of financing for Amazon Sellers but is usually not fully understood. With factoring, you are basically just selling the right to your Amazon Receivable (Amazon Balance) for cash today rather than waiting for your next Amazon payment. You can think of this financing as payday loans for Amazon Sellers.
For example, if Amazon owes you $100k today, there are companies that will pay you $90k today and then collect your payable over time as Amazon pays it out. While receivable factoring doesn't solve any long-term cash flow or investment needs (you're basically just borrowing against next month's paycheck for cash today), it can be helpful during a short-term cash crunch.
Revenue-Based Loans for Amazon Sellers (or "revenue purchase agreements") have become popular with fintech Amazon Seller Funding Solutions because investors can make above-market returns with limited risk.
With a revenue-based Amazon loan, the lender will take a percentage of your sales every month directly out of your account. Usually, around 20% of your monthly sales are required to go to the revenue-based lender. Depending on the loan details, revenue-based loans can be good for short-term cash needs like a big inventory purchase but they are not a good long-term solution due to the high payments.
For example, to qualify for $25k in funding, your Amazon Sales are likely around $50k per month. If you're paying the average 20% of revenue, you're paying $10k per month on a $25k loan which will result in huge cash flow issues in the medium and long term.
About AccrueMe®
AccrueMe provides success-based financing for Amazon Sellers. With decades of experience in lending, AccrueMe's leaders have created a completely new way of providing capital, powered by a proprietary portal built around leading-edge eCommerce technology. With unprecedented line of sight into business data, AccrueMe’s portal simplifies financing for online retailers in a way that was never before possible: based entirely on sellers' success, and repaid when best for the seller, and not based upon a pre-determined schedule. Ecommerce retailers have built their businesses on the latest technology, we believe they deserve financing from a partner that's powered the same way. AccrueMe: cutting edge capital for eCommerce. Learn more at AccrueMe.com
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