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Amazon suspends merchants’ loan repayments during COVID-19 crisis

Amazon suspends merchants’ loan repayments during COVID-19 crisis

As merchants are threatened by the declining sales due to the coronavirus crisis, Inc recently announced to ease their problems by not requiring the sellers in its marketplace to repay loans temporarily.

The E-commerce giant notified sellers that its Amazon Lending program would pause repayments starting 26 March until 30 April 2020. In addition to this, no interest would accrue during this period.

Amazon Lending has offered sums between $1,000 to $750,000 to merchants in its marketplace looking for capital to acquire inventory, advertise on Amazon and expand their product lines.

In 2017, more than 20,000 merchants procured loans from Amazon. The e-retailer said that at the time it had loaned out more than 1 billion of capital to sellers in the preceding 1 year.

As the sellers won’t be required to repay loans for 1 month, it will ease out the pressure several small merchants are facing, being already squeezed by the coronavirus outbreak.

The announcement came on the heels of Amazon’s abrupt plan to stop receiving non-essential inventory in response to the COVID-19 spread. This made several merchants to panic as this could strangle the sales and especially when they need to make payments for their Amazon loans.

Reportedly, Amazon automatically takes out loan payments from the account from where it receives bi-weekly sales payments. However, if that credit falls short, the bank account would go the Amazon’s defaulter list.

For the record,  Amazon’s lending program that started in 2011 makes loans of $1,000 –1 million to qualified merchants and utilizes seller’s inventory in Amazon warehouses as collateral. The repayment terms are set between 3-12 months, and interest rates generally range from 6%-19.9%.


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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for, spanning the verticals of business, finance, and technology.