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Amazon Business Line of Credit - What Is It For?
Aloha, Amazon Seller!
Amazon’s Business credit is a great fit for small to large businesses that rely on purchases from online retailers. Learn more information in our article.
Amazon.com is a platform where millions of buyers shop online daily, and they are not only individuals. There are a lot of corporations that are frequent shoppers on Amazon. E-commerce offers a lot of opportunities for a business, including competitive pricing, discounts, and rich choice. For them, finding the right financing options is important in order to effectively manage their financials and accounting.
Amazon, in partnership with Synchrony Financial company, came up with a simple and effective financing option for all sizes of businesses making purchases on Amazon. They’ve offered a line of credit for the platform’s frequent shoppers who are interested to get Amazon commercial credit at zero or low interest depending on the Amazon line of credit option they select.
In this blog we’re going to discuss, what is Amazon business line of credit, and who is it right for.
What is Amazon Business Line of Credit?
The Amazon Business credit line is a financing option for small and large businesses that shop a lot online particularly on Amazon. on Amazon Business or Amazon.com. It’s an Amazon business credit, allowing companies to effectively manage their inventory and easily monitor purchases. With this loan, you can get an Amazon small business credit with no hassle.
According to Amazon, “an Amazon Business Line of Credit is ideal for organizations looking to simplify their purchasing and reconciliation, without having to sacrifice the flexibility and control required to manage their business. Your Amazon Business Line of Credit comes with a dedicated account management team to help you personalize your credit line to suit the needs of your business”.
An Amazon creditline is issued by Synchrony Bank.
Advantages of Amazon Business Line of Credit
With an Amazon Business Credit, can easily track their spending in monthly statements with consolidated invoices, take advantage of 55-day payment terms with no interest applicable.
Amazon business credit line solution offers:
- Pay-in-full line of credit;
- No interest and annual fees applied;
- Invoices are to be paid during 55 days;
- You get monthly statements with consolidated invoices;
- Purchase order includes detailing down to SKU;
- You get account management team support;
- Payment is done by purchase order;
- You can manage an account via an eService platform;
- You can customize groups having access to a credit line, divide the credit line into sublines for each group.
How Does Amazon Business Credit Line Work?
Amazon provides two options of credit line solutions: a pay-in-full line and a revolving line.
The pay-in-full line charges no interest but requires that you pay off the balance after each billing period. The revolving line allows you to carry a balance, but you’ll pay interest to do so. If you want a longer interest-free period or to earn rewards, you may want to consider one of the best small business lines of credit.
Pay-In-Full Credit Line from Amazon
In this solution, no interest and no annual fee are charged. You need to repay invoices in full during 55 days, which gives you more time to repay a loan than the typical credit card options. This offer is attractive to large businesses since there is a possibility to provide purchasing authority to multiple employees at different levels and subdivide the total credit line into separate lines.
Revolving Credit Line from Amazon
In the revolving credit line solution, a fixed interest rate is charged on balances carried from month to month. With this offer, you can either reimburse each month’s credit in full or pay 12.99% APR on balances that are not repaid. This type of loan is a suitable option for small and medium-sized businesses who would prefer to repay small amounts or disburse monthly payments, considering that the APR with this offer from Amazon is lower than the typical SMBs credit card payments.
Who the Amazon Business Credit Line Is Best For?
This Amazon’s offer is suitable for businesses of all scales who often shop online. A plus of this option is that you don’t have to provide a repayment guarantee, however, you need to have at least two-year operation history.
The Amazon business credit line suits best:
Businesses frequently shopping online – you’ll need to state estimated purchase capacity on Amazon in the application form;
Established companies with at least 2-year operating record that can pay the full invoice on 55-day repayment terms;
Small businesses who want to repay limited monthly amounts – this can be done under the revolving credit line option;
What Are the Charges Under Amazon Credit Line?
Both credit line options imply no annual or setup fees. The pay-in-full offer charges no interest, while the revolving line charges the fixed APR rate of 12.99%.
The pay-in-full Amazon line costs are as follows:
- The late payment fee is 2% on the adjusted monthly balance;
- Returned check fee is $29;
- Repayment terms: balance is repaid 55 days following every invoice;
- Minimum monthly payment: total balance.
The revolving Amazon line costs are as follows:
- APR rate: 12.99% APR for revolving balances;
- Delinquency APR: 29.99% if a minimum payment is not made;
- Late payment fee: $39.99;
- Returned check fee: $29;
- Repayment terms: minimum monthly payment of $50, one-twelfth of a new balance or the sum of the following: charges, the late payment fee, and 1% of a new balance.
Pros and Cons of the Amazon Business Credit Line
Amazon’s Credit Line is a perfect match for business owners who are regularly purchasing on Amazon. This financing option gives access to a line of credit on more favorable conditions than you generally find on the market. This works for any size of business. However, it’s limited to solely purchasing on Amazon.
Pros of the Amazon Business Credit Line
Business size doesn’t matter: Amazon’s credit line suits both SMBs and large corporations – everyone can choose an offer that fits them best.
Charges are low: with the pay-in-full option there’s no interest charged; with the revolving line an APR rate is 12.99%, which is also lower than the average offers on the market.
Extended repayment period: with the pay-in-full option, the repayment period is 55 days from the date of invoice reception.
Dedicated account management: for customers with over $100k annual spend, a dedicated account management team helps manage line of credit.
Flexible account settings: you can set up separate accounts under your company’s total credit with separate purchase access authorizations.
Cons of the Amazon Business Credit Line
Can be used for Amazon purchases only: with Amazon business credit line, it’s not possible to buy anything off Amazon.
There are certain purchasing restrictions: with Amazon business credit line, not every product can be purchased.
You are not allowed to buy the following products:
- Cellphones associated with a plan;
- Textbook rentals;
- Games and software downloads;
- Digital newspaper and magazine subscriptions;
- Prime memberships;
- Subscribe & Save and recurring delivery orders;
- Print at home and email Amazon.com gift cards.
No rewards are earned: with Amazon business credit line you won’t get any rewards, while with other options you’ll earn up to 5% return.
How is Amazon Business Credit Different from Amazon Business Credit Card?
Amazon's business credit line can only be used to purchase on Amazon and the balance shall be repaid in full every 55 days. With Amazon's business credit there’s no need to pay a balance in full and you can use it to buy goods off Amazon. The credit card also offers cash back rewards. The Amazon Store Card credit limit starts from $400 in most cases, and it’s $1,500 on average. You can get an Amazon credit line increase if you file an Amazon request credit line increase. Your limit can also be upgraded by the credit card company if you pay your bill on time.
How to Apply for an Amazon Business Line of Credit?
Step 1. To file an application for an Amazon Business line of credit, navigate to the credit line page on Amazon's website and click "Apply Now."
Step 2. Fill in the application form from Synchrony Bank.
Step 3. Provide the following information:
- Business name;
- Business address, phone number, and email address;
- Business type;
- Annual revenue;
- Tax ID number;
- Information about the authorized representative or owner.
Step 4. Provide a personal guarantee, if you wish.
Enjoy your sales and don’t forget about your product’s profitability and KPIs, it’s very important to keep track of them as they show your account health. To do the analysis easily, you can use Business Analytics Seller tools, like SageSeller. With this tool, you can keep track of your sales, costs, and profits and see where you can optimize them. Also, you can see sales and profit dynamics showing you how healthy is your business.