Merchants of popular items from toys to apparel have worried that the temporary ban on stocking goods in Amazon warehouses
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 (846.5 pounds) 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.
More than 20,000 merchants have gotten loans from Amazon, the company said in 2017. By the end of 2019, Amazon stood to receive $863 million from sellers to whom it provided financing through the lending program, according to a company filing. The loans’ terms range from three to 12 months, carrying interest rates from 6 per cent to 19.9 per cent.
As Americans turn to online shopping while quarantined, many online sellers, who are small and medium-sized businesses, are facing cash flow constraints amid supply chain and logistics issues caused by the outbreak. EBay Inc , another major online marketplace, said on Wednesday it will defer most selling fees for merchants for 30 days.
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