Mar 26, 2020
Amazon pauses sellers' loan repayments amid coronavirus
Mar 26, 2020
Amazon.com Inc on Wednesday said it temporarily would not require sellers in its marketplace to repay loans it had made to them, as merchants confront the prospect of declining sales during the coronavirus pandemic.
The world's largest online retailer notified sellers that its programme known as Amazon Lending would pause repayments beginning Thursday until April 30. Interest would not accrue during that period, it said.
The programme has offered sums between $1,000 and $750,000 to merchants looking for capital to acquire inventory, expand their product lines and advertise on Amazon.
"Loan repayments will restart on May 1, 2020 ... You will have the same number of remaining payments once repayment resumes," Amazon said in a seller message obtained by Reuters.
The company's offer may provide relief to sellers, some of whom could be hard hit by Amazon's recent decision to restrict its U.S. and European fulfilment services to household, medical and other essential goods in demand during the outbreak.
Merchants of popular items from toys to apparel have worried that the temporary ban on stocking goods in Amazon warehouses, on which they depend for delivery, would mean low sales and difficulty paying back loans.
Jamison Philippi, an Amazon seller of toys and video games in Hackensack, New Jersey, had estimated to Reuters his income could drop by 75% just as he had a roughly $3,500 loan payment due to Amazon on April 1.
"That's super awesome. I cheered when I got that email. That relieves a lot of stress right now," Philippi said.
Amazon's move came after at least one rival offered sellers relief.
Ricardo Pero, chief executive of lending company SellersFunding, last week told Reuters he was easing terms to help sellers on Amazon and other marketplaces navigate the rapidly changing retail market.
SellersFunding offers lines of credit and term loans to new and existing borrowers. Both products offer a 90-day interest-only period.
Amazon, which had won customers by continually making shipping faster over the years, has now slowed delivery to weeks in some cases in order to manage a flood of orders. That could also dampen merchants' sales as shoppers look elsewhere for goods.
It was unclear what additional relief Amazon might provide to sellers, if any.
More than 20,000 merchants have gotten loans from Amazon, the company said in 2017. The e-commerce giant said at the time it had doled out more than $1 billion (846.5 million pounds) to sellers in the preceding 12 months.
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