Amazon is launching a service to offer merchants on its platform cash advancements.
In Brief:
The advancements will be repaid from future sales and don’t involve credit checks or late fees.
The tech giant has partnered with Parafin which offers an end-to-end solution for one-click financing.
The programme will be available to users in the US.
What does this mean?
Amazon is aiming to help with the cash flow problems many businesses will be experiencing at the moment which are exacerbated by the lack of finance options for smaller merchants. While no credit history is required, Parafin specifies on its site that underwriting is based on sales, and repayments will be taken as part of future sales, with no payments being taken on periods when the business is not selling. Depending on various criteria, users in the US will have access to between $500 and $10mn.
It’s an interesting step on Amazon’s often discussed journey to being a distribution channel for an increasing number of financial services.
