In response to the economic impacts of the coronavirus pandemic, Amazon has announced a temporary halt on loan repayments for sellers on its marketplace. The company’s lending program, Amazon Lending, will pause all repayments starting from Thursday until April 30. During this period, no interest will accrue on the loans.
This decision comes as many sellers are experiencing declining sales due to Amazon’s restriction on stocking non-essential goods in its warehouses. This has raised concerns among merchants about their ability to generate enough sales to repay their loans.
The announcement from Amazon has brought much-needed relief to sellers who have been struggling with the uncertainty and financial strain caused by the pandemic. One Amazon seller, Jamison Philippi, shared that his income could potentially decrease by 75% just as he was about to make a $3,500 loan payment to Amazon on April 1. Philippi expressed his gratitude upon receiving the email from Amazon, stating that it “relieves a lot of stress right now”.
Amazon’s decision follows a similar move by lending company SellersFunding, which has eased terms to assist sellers on Amazon and other online marketplaces. SellersFunding provides lines of credit and term loans, both of which now include a 90-day interest-only period.
It remains uncertain what further relief Amazon may offer to sellers in the future. However, the company has a track record of supporting sellers through its lending program. In fact, in 2017, Amazon revealed that over 20,000 merchants had received loans totaling more than $1 billion in the previous 12 months.
As the coronavirus pandemic continues to disrupt economies worldwide, companies like Amazon are taking steps to alleviate the financial burdens faced by sellers. By temporarily pausing loan repayments and offering relief, they aim to support sellers during this challenging time and help them navigate the rapidly changing retail market.