Amazon, Goldman will offer small-business lines of credit

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Amazon will soon offer lines of credit to its U.S.-based sellers through a new arrangement with Goldman Sachs, the two companies said Wednesday.

Small businesses selling on Amazon will soon receive offers to apply for a business line of credit of as much as $1 million with Goldman’s online consumer bank Marcus, as CNBC reported earlier in the day before the companies confirmed the news. The new line of credit will carry a fixed interest rate ranging from 6.99% to 20.99% and can be used for a variety of purposes.

“Sellers can use funds to cover staffing and operations costs, buy more inventory for improved cost efficiency, invest in product development and manufacturing, or expand marketing efforts to build their brands and grow their customer base,” Amazon said in an announcement to its merchants Wednesday.

Published reports earlier in the year had said an arrangement between the two companies was in the works. Amazon Lending already offers term loans to merchants on its platform, reportedly using capital provided by Bank of America.

The venture with Goldman will be a revolving line of credit and represents the first time Amazon has let a third party control the underwriting process.

Amazon will share merchant data with Goldman, which will then use business revenue data to underwrite the lines of credit. An Amazon spokesman said by email that the company shares that data with Marcus only if sellers consent to it and that Marcus also uses that data only to make a lending decision. The spokesman said Amazon also does not have access to information Marcus collects as part of its qualification process.

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Commercial lending Small business lending Amazon Goldman Sachs