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Amazon (AMZN +2.5%) appears to be in the lending game with a new business called Amazon Lending...

Amazon (AMZN +2.5%) appears to be in the lending game with a new business called Amazon Lending that makes loans available to some of its online sellers. A copy of the e-mail that Amazon sent to pre-qualified customers was nabbed by ChannelAdvisor with the gist being that sellers can land a loan within five days for rates around 13%.
Comments (19)
  • AMZN now becoming a pawn shop.
    27 Sep 2012, 01:37 PM Reply Like
  • Not a bad business to be in. Wish I had bought EZPW in 2009
    27 Sep 2012, 02:14 PM Reply Like
  • That 13% rate can be pretty good if it's going to good credits. It's also a lot cheaper than what pawn shops and factors offer.
    27 Sep 2012, 01:38 PM Reply Like
  • It could be very good if you know what you're about on eBay, where you can easily double or triple your money with the right repeat customer. I wouldn't recommend it to anyone with a local-only oriented business.
    27 Sep 2012, 10:53 PM Reply Like
  • you do know that we are in 0% environment, right?
    27 Sep 2012, 01:39 PM Reply Like
  • The cost of money is fairly meaningless if you can't get a loan. And many merchants have a very hard time getting loans. Pawn shops and payday lenders -- or their corporate equivalents -- are their only hope in many cases.

     

    Compare what AMZN is offering its merchants, unsecured, with the secured rates of most factors. Then put yourself in the merchant's place, and make a rational decision.

     

    If this banks were lending this wouldn't be a deal. But they're not.
    27 Sep 2012, 02:12 PM Reply Like
  • These are not people on welfare who are collecting food stamps with at FICO of 600. These are sellers who are per-qualified with above average selling performance. I know someone who received this letter, and they are definitely not in need of it.
    27 Sep 2012, 02:17 PM Reply Like
  • Bravo, Mr. Blankenhorn. You've nailed it.

     

    All those college students inundated with Capital One credit cards at 19 or 23% didn't pay it back. They simply carried it with them. The predatory lending of the earlier part of the 21st century was such that a that a 6 year old could get a $2,000 loan. This slice of the demographic pie can no longer afford a loan at any price, because they don't qualify.
    27 Sep 2012, 10:58 PM Reply Like
  • Nooooooooooo, but when I was flipping rare books at margins that would challenge your suspension of disbelief in 2005-7, I could have put the money to good use at those rates. I didn't, because I reasoned as you do, to wit: That I could generate the same amount via weekly sales, and had no need of a bigger war chest, financed by a third-party.

     

    I was mistaken.
    27 Sep 2012, 11:07 PM Reply Like
  • add it to their list of disparate businesses: cloud storage, third-rate tablets, delivering tomatoes, and now pay-day loans ... what exactly is their mission statement? we will undercut your price for everthing and then hope to earn 5 cents a quarter?
    27 Sep 2012, 01:43 PM Reply Like
  • We will grow and grow and grow in every way we can. That's their mission statement. Don't like it? Don't buy their stock.
    27 Sep 2012, 02:13 PM Reply Like
  • Wilful ignorance is the death of a trader.
    27 Sep 2012, 11:10 PM Reply Like
  • And AMZN obliterates shorts again. Love it.

     

    AMZN going for $400 per share or more in a couple of years.
    27 Sep 2012, 04:24 PM Reply Like
  • This I believe is really an interesting development. It highlights the problems that small businesses have in obtaining credit, in an environment where the regulators have created an environment not conducive to banks lending.

     

    In evaluating their risk, what Amazon does have is its own history regarding how much product the etailer has sold through Amazon, and the etailer's trends.

     

    The interest rate while appearing at first glance as being high in a world where Treasuries are near zero, really isn't that expensive when compared to credit card interest rates.
    27 Sep 2012, 06:04 PM Reply Like
  • Excellent move by AMZN on small business lending, albeit at high rates. They could also add traditional pawn services to their e-commerce line, but this sounds like more of a credit card company relationship.
    27 Sep 2012, 07:34 PM Reply Like
  • Brilliant! It's about time AMZN gets into the banking and finance industry. This is AMZN's QE1.
    27 Sep 2012, 08:03 PM Reply Like
  • AMZN wont touch WMT when it comes to providing financial services ;)
    27 Sep 2012, 09:54 PM Reply Like
  • @chopchop0

     

    When will AMZN launch a buyers' credit program to match this sellers' loan program? To continue to "grow and grow and grow", AMZN could give buyers credit in order to buy more stuff from sellers. That would be AMZN's QE2!
    27 Sep 2012, 10:00 PM Reply Like
  • risky risky
    27 Sep 2012, 09:25 PM Reply Like
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