After over a decade of supporting Amazon sellers with financing, Amazon Lending shut down its loan underwriting operations on March 6th, 2024. This business shift surprised many in the ecommerce space. For years, Amazon offered term loans to sellers, giving them fast access to capital to help finance inventory and scale their businesses. Now, as this era comes to an end, sellers are left wondering where to turn for financial support.

What is Amazon Lending?

Amazon Lending launched in 2011 as a solution for merchants selling through Amazon’s marketplace to access quick and convenient financing. The program provided an alternative to traditional bank loans, offering term loans, lines of credit, and other financial products. Loans were disbursed through sellers’ Amazon accounts, with repayments automatically deducted from their sales. This system was ideal for sellers looking to finance inventory orders, manage cash flow, and scale their businesses faster. However, Amazon decided to discontinue the program after more than a decade of operation.

Why is Amazon Lending Shutting Down?

The reasons for shutting down Amazon Lending remain speculative, but several factors likely contributed. While Amazon has not provided specific details, reports suggest internal concerns about the increased loan risks.

Despite these challenges, Amazon continues to offer financing solutions through trusted third-party providers but no longer underwrites its own loans. For sellers, this means they needed to form new relationships with unfamiliar lenders, often leading to stricter terms and potentially slower access to funding compared to the in-house service they were accustomed to.

The Impact on Ecommerce Sellers

The discontinuation of Amazon Lending disrupted the financial stability of many sellers, especially small and medium-sized businesses that relied on these loans for quick, easy access to capital. With over 60% of Amazon sales coming from independent sellers, the ripple effects of this change are widespread.

For ecommerce brands, specifically those that depend heavily on Amazon for sales, the loss of a reliable funding source may hinder their growth. Without immediate access to financing, sellers might struggle to restock inventory, expand operations, or cover operational expenses. This could lead to longer fulfillment times, out-of-stock listings, and missed sales opportunities, ultimately affecting the overall customer experience on the platform.

Alternatives for Ecommerce Business Funding

As Amazon moved away from its  lending program, alternative capital providers stepped in to fill the gap. Clearco, one of the largest funding solutions for ecommerce businesses, offers a flexible and scalable option through revenue-based funding. This non-dilutive financing allows businesses to receive funds in exchange for a percentage of future sales, rather than through traditional loans with fixed monthly payments.

Clearco’s model is particularly attractive to ecommerce brands because it aligns repayment with actual business performance. Sellers can quickly access capital—often within days—and use it for essential expenses like inventory and marketing. During slow sales periods, businesses aren’t burdened with fixed fees, offering a level of financial protection that traditional loans don’t provide.

Final Thoughts

The end of Amazon Lending marked a significant change for sellers on the platform, but financial support options are still available. While Amazon’s in-house loans will no longer be an option, third-party providers like Clearco offer revenue-based funding solutions that provide flexible, fast, and scalable access to capital. If you own an ecommerce business and are seeking alternative ways to manage cash flow, consider Clearco as your trusted partner for working capital, whether it’s to fund invoices, inventory, or other key operations.