What Is The Amazon Merchant Cash Advance Program?

Amazon offers merchant cash advances to eligible sellers through its Amazon Lending program.

Amazon Merchant Cash Advances are a streamlined funding option for Amazon sellers, but is this financing right for your business? In this post, we’ll break down everything we know about Amazon MCAs to help you decide whether this financing fits your business.

What Are Amazon Merchant Cash Advances? The Quick Answer

Amazon has partnered with Parafin to provide merchant cash advances to Amazon online sellers. Eligible sellers may receive funding through this program. This is a non-revolving form of financing that provides fast access to capital.

Borrowers pay a fixed capital fee, and repayment is tied to a portion of future gross sales. There is no interest, no late fees, and no personal collateral required.

The Cost Of Using An Amazon Merchant Cash Advance

Merchant cash advances work differently from other types of small business funding. While you will receive a lump sum payment, an MCA is not a traditional loan. Instead, you are selling a percentage of your future sales in exchange for an upfront payment. Repayment is made through a set percentage of future gross sales.

Amazon MCAs do not have a traditional interest rate. Like other merchant cash advances, this funding has a fixed capital fee that is repaid — along with the funds borrowed — over time. Amazon does not publicly disclose standard pricing for individual offers, so sellers should review their offer details carefully before accepting.

MCAs may be easier to access than some other forms of financing, but they can also be expensive, so sellers should review eligibility and offer terms carefully. Additionally, frequent repayments tied to sales can impact cash flow for some businesses.

Before accepting a merchant cash advance from Amazon, make sure to carefully review the costs and terms before accepting the offer. Still unsure of the costs of MCAs and other short-term funding? Check out our post to learn more about how to calculate the cost of MCAs and short-term loans.

Qualifying For An Amazon Merchant Cash Advance

To be considered, you must be an eligible Amazon seller. Amazon says eligible small and midsize businesses in the U.S. may receive invitations through Seller Central. For MCAs, Amazon also states that no personal collateral is required.

Amazon says sellers may become eligible for one or more Amazon Lending or third-party financing offers over time.

How To Apply For The Amazon Merchant Cash Advance Program

Amazon Merchant Cash Advances — in addition to all other financial products offered through Amazon Lending — are available by invitation only to qualified Amazon sellers.

If you’re eligible, you can review available financing offers in Seller Central and begin the application there.

Next, follow the instructions to fill out and submit the application. The time it takes to review and provide an approval decision for your application varies by product. Additional information and documentation may be required during the process, which may extend approval and funding timelines.

Should Your Business Get An Amazon MCA?

If you have trouble finding financing elsewhere because of credit score challenges, collateral requirements, or the age of your business, an Amazon Merchant Cash Advance may be a good choice for you. If you’re an Amazon seller considering an MCA and want a quick, easy application process, it doesn’t get much simpler than applying right through Seller Central.

However, if you aren’t an Amazon seller, can obtain more affordable funding elsewhere, or want better rates and repayment terms, consider looking at Amazon’s other funding options or check out other lenders.

The Bottom Line On Amazon Merchant Cash Advances

Amazon Lending has opened up several funding opportunities, and its merchant cash advance program is just another financial resource for Amazon sellers. The program is designed to provide fast, straightforward access to funding for eligible sellers.

This could be a solid option for borrowers who are having difficulty securing financing elsewhere due to poor credit scores, no collateral, or other challenges. However, as with other merchant cash advances, make sure that you’re fully aware of fees and repayment terms before you commit.

If you decide that an Amazon MCA isn’t right for you or you haven’t received an invitation, there are other funding options out there. Check out our picks for the top same-day business loans and MCAs to find the funding your business needs.