Jeff Bezos’ Amazon is planning to expand its lending operations to small firms in the US, the UK and Japan.
Editor’s Remarks: This is a remarkable challenge to the big banks that usually dominate the sector. Amazon Lending was launched six years ago, and offered 12-month loans that charged an annual interest rate of between 6% and 17% to Amazon sellers. Since then, Amazon has completed over $3bn worth of loans, with $1bn in the last year alone. Now, Amazon wants to extend its loan services to more of the 2 million businesses that are registered on its marketplace platform. Presently, Amazon supplies funds from its balance sheet within a day, and then proceeds to deduct payments every two weeks from the seller’s accounts. This latest move comes just after Amazon’s share price breached the $1000 mark and amidst a trend that increasingly shows large lenders are moving away from small businesses. Will today’s tech giants be tomorrow’s small lenders?