An Amazon Loan is a fantastic tool. Easy paybacks, quick turn-around, revolving around your inventory, and no other collateral is needed. Sometimes, however, the typical Amazon seller wants to purchase more inventory. Let’s speak about how….
Very often, the turn-around time to see Return on Investment to an online Amazon seller is very fast. Every $1 invested can be turned around to $1.30 within 1-2 months! Every business is different, but even if the cost of capital is high, the ROI justifies the high cost of capital and shorter term than a standard bank loan.
A Term Loan might justify a large injunction of capital to expand…. but to buy inventory, it just doesn’t make sense. It’s too much money at once, and won’t renew enough. What would be needed is a term loan with low stipulations with quick approval, and enough money to service the debt.
We’ve spoken about Lines of Credit on other posts. Since Amazon files a UCC lien against the inventory, the next likely place to turn for Line of Credit would have to be an Unsecured Business Line of Credit or a Secured Line of Credit, using real estate as the collateral. There are two types:
We have lenders who will take a second position on title of any real estate, providing a Line of Credit up to $5mm, providing up to 10% yearly gross revenue. Clients will need a FICO over 650, strong bank statements, profitability, and be doing at least $2mm yearly to qualify. It’s a fantastic way to supplement your Amazon Loan, and use existing collateral to obtain similar rates to Amazon, with interest-only monthly payments.