• Reuters reports that Amazon is getting into the business loan business, "offering loans to some of its online sellers, a move that could boost the growth of its Internet marketplace while exposing it to potential credit risks ... Getting into the lending business is a big step for Amazon that will expose it to more credit risk but may also fuel more sales by merchants on its marketplace. Amazon takes a cut of those sales, so revenue and profits could get a boost."
The story says that Amazon has offered some sellers as much as $800,000, which one observer says is "pretty aggressive" ... interest rates can be as high as 13 percent, but also as low as one percent, depending on the seller ... and companies are being pre-qualified based on their previous performance on Amazon. In offering these loans, the story says, "Amazon is competing against a start-up called Kabbage, which extends cash advances ranging from $500 to $50,000 to online merchants."
The story says that Amazon has offered some sellers as much as $800,000, which one observer says is "pretty aggressive" ... interest rates can be as high as 13 percent, but also as low as one percent, depending on the seller ... and companies are being pre-qualified based on their previous performance on Amazon. In offering these loans, the story says, "Amazon is competing against a start-up called Kabbage, which extends cash advances ranging from $500 to $50,000 to online merchants."
- KC's View:
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Just goes to show how far Amazon will go to make sure its marketplace is both viable and sustainable.
