Amazon, Goldman Sachs Partner for Marcus SMB Credit Lines

Need to Know

• Small business owners who sell on Amazon will soon be seeing ads for credit lines of up to $1-million from Goldman’s Marcus brand.
• Amazon will share seller data with Goldman, which will help the Wall Street finance giant’s move into Main Street banking.
• The partnership marks the first time Amazon has allowed an outside party to lend to its sellers.
• Credit lines can help ease merchant stress during high-sales periods, such as holidays, as Amazon typically only pays biweekly.

Analysis

Amazon has partnered with Wall Street finance giant Goldman Sachs to offer a credit line program for its sellers, marking the first time the e-commerce juggernaut has allowed an outside party to lend to its sellers.

On Wednesday, CNBC reported that Amazon’s small-business owners would soon begin to see advertisements for credit lines of up to $1-million from Goldman’s consumer-facing brand, Marcus. Credit lines will reportedly be offered with a fixed annual interest rate of 6.99% to 20.99%. The ad will appear via Seller Central, Amazon’s online hub for merchants. Interested sellers can then apply using a two-step process within the hub.

The partnership will mark the first time that Amazon, which has its own small-business lending program, will allow an outside party to have access to its underwriting processes. Under the partnership, Amazon will only share seller data if merchants agree and Goldman will use that data for credit lines, not to make product offers. In addition, Amazon will not be given data from Goldman that the company collects from sellers for credit qualification processing.

Amazon and Goldman have been in talks for a partnership since 2018, and was at that time referred to internally within Goldman as Project Augusta. The two businesses have a close relationship, with Amazon having used Goldman for its $13.7-billion takeover of Whole Foods in 2017.

Goldman has recently been partnering with a series of brands and businesses as it continues to move towards a more robust suite of Main Street banking products under its consumer-facing Marcus brand. in 2019, Goldman helped Apple launch its first credit card; a year later, the company launched a loans program with JetBlue.

Since 2016, Marcus has offered consumers branch-free banking, which features digital wealth-management and chequing options to non-Wall Street consumers. The app version of Marcus launched in early 2020.