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  • Writer's pictureAccrueMe Team

How To Qualify For Financing For Amazon Sellers

Financing for Amazon Sellers has become more widely available over the last few years. Unlike consumer mortgages or car loans, there is a very wide variety of financing structures and terms available to Amazon Sellers depending on their business stage and other various factors.

There are usually Amazon Sellers in 3 different stages of their businesses looking for funding including;

1. Start-Up Funding,

2. Smaller or Struggling Sellers,

3. Medium - Large Profitable Sellers

Depending on the stage you are with your business, you will have different financing for Amazon Seller options available.

For Amazon Sellers looking for funding to start or launch their Amazon Business, there are limited options that will mostly rely on Amazon Sellers' personal connections, skills, and relationships. There are no banks or professional investors funding the launch of new Amazon businesses leaving would-be-sellers to rely on their personal resources.

Amazon Sellers have launched retail arbitrage and wholesale businesses with as little as a couple of hundred dollars and private label businesses with $5k-$20k. If you don't have any liquid cash to start your Amazon business, you still have some options including;

Often referred to (jokingly) as "blood money", investment from family and friends is a popular way for cash-strapped entrepreneurs to get start-up capital. Usually, these deals are structured as some sort of equity partnership or a simple loan. For entrepreneurs tight on cash but rich in relationships, this is the easiest and most popular route to get funding to start selling on Amazon. If following this path, know that you will probably be in for a lot of business questions over the holidays!

Many Amazon Sellers start their Amazon business with credit cards and if you have a decent credit score this could be a good option. When using your personal credit cards to start an Amazon business, it is very important that you start small, invest in education, and gain confidence in your ability to generate sales on Amazon. Using credit cards to start an Amazon business can be very risky if you don't know exactly what you're doing.

Entrepreneurs with strong marketing skills and a reasonable budget might want to explore crowdfunding on platforms like Kickstarter as a path to funding their new business. While technically anyone can launch a crowdfunding campaign, running a successful campaign can become a full-time job in itself so this method is really only recommended for those with a strong marketing background.

As you grow your Amazon business to at least $10k per month in sales, specialty Amazon Seller Financing options 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 including;

Factoring is a popular financing method 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.

Once an Amazon Seller establishes the ability to run a profitable Amazon business, more business-friendly financing for Amazon Sellers becomes available. In most cases, you will need at least 1 year of consistent Amazon sales (AccrueMe, listed here, only requires 6 months) and at least $25k in monthly revenue to begin to qualify for options like these;

Amazon Seller loans like those offered by Amazon Lending are some of the only traditional style loans available to Amazon Sellers. Usually offered with rates of 10% to 18% these are a good option for a mature Amazon business no longer growing exponentially IF the length of the loan is at least 12 months.

Term loans for Amazon Sellers are usually offered with terms of 3 to 24 months. Because most term loans for Amazon Sellers require equal monthly payments, the length of the loan will have a big impact on your monthly payments and thus your business cash flow.

For example, a $100k term loan with a 3-month term will require monthly payments of about $33k while a 24-month term for the same loan will require a monthly payment of about $5k. While $5k per month is still a large amount of cash flow for the typical business borrowing $100k, it usually is not business crippling like a $33k monthly payment would be.

With a long repayment term (18+ months), a term loan can be a good option for mature Amazon businesses that don't need to maximize cash flow or grow quickly.

AccrueMe offers completely unique success-based financing for Amazon Sellers through a one-of-a-kind profit-share model. Unlike most of the other financing options for Amazon Sellers which are built around aggressive repayment schedules, AccrueMe was founded to allow Amazon Sellers to grow without having to pay a lender every month.

With AccrueMe, you repay on your schedule so many of AccrueMe's portfolio companies do not making a single payment for months or even years.

Unlike revenue-based loans, AccrueMe earns a floating share of your monthly bottom line profit (Sales - COGS - FBA Fees - Amazon PPC) so AccrueMe only earns when you do (there are no fees or other charges with AccrueMe). Keeping with its no required payments philosophy, you can choose to accrue (add it to your balance, rather than pay) AccrueMe's profit every month rather than paying them monthly.

For profitable Amazon Sellers looking to maximize their cash flow and compound growth, there is no other financing option for Amazon Sellers like AccrueMe.

Successful private label sellers may qualify for an equity investment or a full buyout from one of the many groups acquiring eCommerce businesses. Equity investments are typically only available to Amazon Selling businesses with a unique competitive advantage so equity is usually not an option for retail arbitrage or wholesale Amazon Sellers.

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



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