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How Do You Speed Up Cash Flow When You’re Selling on Amazon?

Amazon has historically offered e-commerce loans to select vendors with large enough and consistent enough sales volumes. But according to Forbes Magazine in March 2024, “Amazon will no longer underwrite loans for sellers in its $140 billion Marketplace business.” Waiting for payments can stunt your company’s growth. Selling through online platforms such as Amazon can create additional challenges when securing financing. Many lenders won’t use those types of sales to qualify for funding, or they require high and consistent sales volumes. So what are your options?

Factoring

For vendors who sell products to Amazon, and who wait to receive payment from Amazon for 30-60 days or even longer, factoring receivables from Amazon can eliminate the wait and put capital back into your business immediately.

For vendors who sell products on the Amazon platform, your factoring company may choose not to finance the sales receivables. If this happens to you, consider factoring receivables from other online and brick-and-mortar retailers. Choose invoices for your largest and most financially stable clients to open the factoring relationship.

Assuming a factoring fee of 5%, and an advance rate of 93%, here’s how it would work:

Day 1	Generate an invoice for goods sold on Amazon or receive an Amazon vendor statement (promise of payment) for $25,000 and factor it
– 1-2 Days	Receive an advance of $23,250 (93% advance) Factoring company earns 5% factoring fee
Day 30+	Receive an additional $500 reserve amount after Amazon remits payment

Cash Flow Loans

Sellers may also qualify for a cash flow loan. Often called a merchant cash advance, the cash flow loan sets up loan payments as a percentage of daily sales when payments are made by debit or credit. Cash flow loans can provide quick access to cash flow without fixed monthly payments. Understanding the overall impact on your cash flow is critical before choosing this type of financing. Make sure you have enough remaining cash flow to meet your obligations in addition to the loan payments.

Line of Credit

If the seller has assets that can be pledged as collateral, a lender may set up the loan using collateral that is not directly impacted by inventory sales. While this puts assets at risk when payments are not made on time, collateralizing a loan provides capital when other options are not available. Again, verify that your sales can support the loan payments before taking out the loan.

Speed Up Cash Flow – Explore Cash Flow Loans Online Platform Sales

Our e-commerce loans speed up cash flow for Amazon merchants, service providers, developers, and other vendors selling online.

Amazon, which was a great industry disruptor, is now a way of life for U.S. consumers and shoppers from around the world. Amazon’s selling platform provides an incomparable opportunity for service providers, manufacturers and distributors of any size to exhibit and sell their goods on a global scale few could have achieved on their own.

One of the unique characteristics of the Amazon merchant experience is that goods must be produced, promoted, sold, and shipped 30-60 days before receiving payments for those goods.

Merchants who sell directly to consumers or B2B buyers get paid immediately on selling those goods. The wait time between sale and merchant payment can come as an unwelcome surprise since vendors should generally expect a delay of more than a month before payment is received.

Waiting on payments due from Amazon can delay business growth and make financial management much more challenging. By creating more consistent, expedited cash flow with our Amazon factoring program, your organization can:

Negotiate discounts with vendors and suppliers
Take on new jobs or bigger orders more quickly
Meet payroll and expenses more easily
Stop losing time and money chasing down customer payments
Make needed equipment purchases, repairs, renovation, or expansion
Extend more generous terms to their customers as a competitive advantage
Take advantage of fast-emerging opportunities more easily

If one or more benefits could help you grow your business more quickly, we would happily provide you with a free, no-obligation proposal for Amazon vendor financing.