FinTech: Amazon Launches Credit Line for Small Businesses In Partnership With Goldman Sachs
Amazon has abandoned its plans for a lending ‘marketplace’ with several lenders competing, and opted instead for Goldman Sachs’ Marcus.
Amazon (NASDAQ: AMZN) has launched a new digital credit line for U.S.-based SMB merchants that sell on its platform. The ecommerce giant will offer the facility in collaboration with Goldman Sachs’ Marcus brand (NYSE: GS), according to exclusive information obtained by CNBC.
Credit card like credit line
Selling businesses can avail of credit up to a maximum amount of $1 million. The facility is priced at a fixed annual interest rate of 6.99% to 20.99%.
CNBC quoted anonymous sources to reveal that Amazon sellers can apply for the facility in a two-step process provided they receive an invitation from Marcus. The offer will be visible on Amazon’s Seller Central.
The facility operates much like a regular credit card in terms of withdrawals and repayments.
Goldman Sachs and Amazon bridging the gap between tech and Wall Street
Amazon previously utilized Goldman’s investment banking services for its $13.7 billion takeover of Whole Foods. The online shopping behemoth is now taking the relationship a notch higher.
By allowing Goldman access to information on its sellers Amazon is breaking with its traditional practice of keeping data secure and confidential. The Wall Street bank will be able to access sellers’ revenue and length of activity on the platform to determine eligibility for credit.
Goldman Sachs may only use the data for the credit offer, and not for any other product.
The partnership between Amazon and Goldman is seen as a step forward in the long-anticipated meeting of the reach of tech companies (in terms of customers, suppliers, users etc.) with Wall Street firms (financial muscle looking for new markets).
Previously, Goldman Sachs partnered with Apple (NASDAQ: AAPL) for the latter’s issue of the Apple Card.
Now there is talk that Goldman Sachs is becoming a technology company.
Image Credit: Flickr
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