Finding the right financing for your business can be difficult. With so many options to choose from, how do you know which is right for you? For companies that regularly shop online, Amazon’s Business line of credit makes for a simple and effective financing option. Keep reading to learn more features of Amazon’s business credit lines and how to decide if it’s right for you.
What is an Amazon Business line of credit?
The Amazon Business line of credit is a financing option for businesses that shop on Amazon Business or Amazon.com. Managed by Synchrony Bank, this credit line makes it easy for companies to manage their inventory and track purchases.
When you sign up for an Amazon business credit line, you’ll get a dedicated account management team to help you set up, customize, and manage your line of credit. Businesses that spend more than $100 000 per year will also get an account specialist assigned specifically to their account.
Once your account is set up, you can create separate accounts for each of your organization’s companies, locations, or departments. Then, you’ll receive easy-to-read monthly statements that list your itemized transactions and product-level details for each invoice.
Amazon’s credit line is a pay-in-full line of credit with no interest and no annual fee. You’ll have 55-day payment terms on all Amazon Business purchases, with a requirement to pay the credit line off in full each payment term.
It’s important to note that there are some items you can’t purchase with an Amazon Business line of credit, including:
- Cell phones
- Textbook rentals
- Games and software downloads
- Digital newspapers and magazine subscriptions
- Prime memberships
- Recurring deliveries and Subscribe & Save
- Amazon gift cards via email or print at home
What are the pros and cons of an Amazon Business line of credit?
Before you sign up for an Amazon Business line of credit, you must understand all the pros and cons that come with it.
- No interest or annual fee: There’s no annual fee to use an Amazon business credit line, and because you pay your bill in full each time, there’s no interest.
- Payment terms longer than one month: While Amazon’s credit line does have a pay-in-full requirement, payment terms are 55 days instead of the standard one month.
- Dedicated account management team: When you sign up for an Amazon business credit line, you’ll get a dedicated account management team to help set up and service your account.
- Only works for Amazon purchases: Amazon’s credit line can only be used for Amazon Business or Amazon.com purchases. Since most businesses don’t make 100% of their purchases on Amazon, this is inconvenient.
- Can’t be used for all goods on Amazon: While the Amazon credit line can be used for most Amazon purchases, several exceptions are listed above.
- No rewards: Unlike business credit cards, Amazon’s business credit line doesn’t give you any cashback or other rewards for shopping.
Amazon Business line of credit costs
Amazon currently only offers pay-in-full lines of credit. As a result, you don’t have to worry about paying interest on your purchases. There’s also no annual fee to use your credit line. There are some fees that you may be subject to. There’s a fee of 2% per month or an annualized rate of 24% for late payments.
There’s also a $29 returned check fee.
Amazon Business line of credit reviews
The Amazon Business line of credit has mostly positive reviews. With about 250 total reviews, it has an average rating of 4.1 of 5 stars. Positive reviews were happy with how much easier the credit line has made ordering for their organizations.
Negative reviews primarily point to outdated technology and a system that’s difficult to use.
Who is an Amazon Business line of credit right for?
Now that you’ve learned about the Amazon Business line of credit, you might be wondering whether it’s right for your organization.
There are a few types of businesses that are best-suited to these lines of credit:
- Established businesses: Synchrony Bank, the financial institution that manages the Amazon lines of credit, requires applying organisations in business for more than two years. If you’ve been in business less than two years or don’t have a business credit history, then you’ll have to provide a personal guarantee, meaning you’ll cover the bill if the business can’t.
- Businesses that frequently shop at Amazon: This line of credit can only be used for purchases on Amazon Business or Amazon.com. As a result, you’ll only really get the most of the credit line if you often shop on Amazon.
- Businesses that can pay their bill in full: Amazon’s business line of credit is currently only available with pay-in-full terms (more specifically, they have 55-day payment terms). If you need longer to pay off your purchases, then you might be better suited to looking at a credit card.
How do you apply for an Amazon Business line of credit?
To apply for an Amazon Business line of credit, visit the credit line page on Amazon’s website and click “Apply Now.” You can learn more about the credit line, and when you’re ready to apply, you’ll be redirected to the application form with Synchrony Bank.
To apply, you’ll have to 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
When you fill out the form, you’ll be given the option to provide a personal guarantee. The personal guarantee is optional, but it may be required if your company has been in business less than two years or doesn’t have an established credit history.
Who should apply for an Amazon Business line of credit?
The Amazon Business line of credit is best for established businesses with at least two years of credit history that regularly shop on Amazon.
What’s the difference between an Amazon business credit line and an Amazon business credit card?
Amazon’s business credit line can only be used at Amazon and must be paid in full each 55-day term. Amazon’s business credit card doesn’t have a pay-in-full requirement and can be used at most retailers.
The credit card also comes with cashback rewards.
Are there alternatives to an Amazon Business line of credit?
The Amazon Business line of credit can be an excellent option for companies to simplify their Amazon purchasing, but it’s not the only option.
Here are a few alternatives you might want to consider:
- Amazon Business Prime American Express Card: For companies that regularly shop on Amazon, the line of credit isn’t the only option. Amazon also offers a business credit card, which gives you cashback on most purchases, which you can then use to put toward Amazon purchases. Unlike the credit line, your credit card bill doesn’t have to be paid in full each time (though you’ll pay interest on unpaid expenses).
- BlueVine Business line of credit: BlueVIne is a popular provider of small business credit lines, with amounts ranging from $5000 to $250 000. There are a few benefits to BlueVines credit lines over Amazon’s. First, you can pay back the amount you borrowed over 6-12 months. This is more generous than Amazon’s pay-in-full requirement. The money can also be used for any purpose, unlike Amazon’s credit line, which can only be spent on Amazon purchases.
The bottom line
The Amazon Business line of credit can be an excellent option for companies that regularly shop on Amazon and want to keep those purchases organized with easy-to-read monthly statements. That being said, given the short payment terms and the fact that your credit line can only be used at Amazon, most businesses will probably find that either an Amazon credit card or a credit line with more flexibility works better for them.