What You NEED To Know Before Taking A Loan From Amazon
If you are considering taking a loan from Amazon, or you have already accepted a loan from Amazon, this video contains vital information for you.
Okay, Amazon sellers. So Amazon will loan you money, sometimes hundreds of thousands of dollars or more, and they loan it so you can take the money and use it solely to grow your business on Amazon. And if the money helps you fuel the business, buy more goods and everything explodes, terrific. You got a pretty good interest rate, it grew your Amazon-based business, and everybody is happy.
But that’s not how it always goes. Sometimes your Amazon-based businesses can do really, really well without debt. But when you put the debt onto the account, all of a sudden things change. Or, now you have this debt and there’s a bump in the road, you can’t source your products, you have new competitors, somebody hijacks your listing.
In these scenarios, you got to be very, very careful because Amazon’s contract allows it to go after the business that took the loan. We have never seen a case with a personal guarantee, but we have seen Amazon go after you personally, even though you didn’t personally guarantee the loan.
Now, what Amazon uses as a hook to make that claim, and I don’t agree with it, and we’ve had the claim dismissed in the past, but what Amazon uses is as a hook is that in those first paragraphs of the agreement, you agree to solely use the money for the Amazon based business. Amazon claims that you, a human being, diverted those funds.
So one, think twice before you take a loan out from Amazon. And if you anticipate going into default, I want you to know that you have every right to have the claims against you that are asserted personally, you can ask the arbitrator to dismiss those claims. But you can expect Amazon to not only go after the business but to also go after you personally.