Amazon Lending, the e-retailer's loan offering service, is about to be available in seven more countries including United Kingdom, Amazon told Reuters on Monday.
So far, the service was only available in the United States and Japan, but now the service formed in 2012 will expand to Canada, China, France, Germany, India, Italy, Spain and the United Kingdom.
Head of Amazon Marketplace, Peter Faricy, told Reuters the service is on an invite-only basis and is not open to all sellers on Amazon's platform.
"We know a lot about our sellers' business and invite only those who we think are in the best position to take capital and grow," he said. "Amazon has very little share in China and they haven't been able to break out of that, so this is a very important necessary step for them to be able to grow," said Gil Luria, analyst with Wedbush Securities in Los Angeles.
Amazon offers three-to-six-month loans of $1,000 (£635) to $600,000 (£381,000) to help merchants buy inventory. It makes money on interest and takes a cut of all sales on its marketplace, which now account for about 40 per cent of total Amazon site sales.
Amazon said it has offered hundreds of millions of dollars in loans since 2012, with more than half of its sellers opting for a repeat loan. The company declined to provide specific figures and also did not say how much it plans to lend this year.
Small businesses have high failure rates, especially in China and India, said William Black, a former U.S. banking regulator and professor of Economics and Law at the University of Missouri.
Anthony Duffy, director of retail banking in UK & Ireland at Fujitsu has commented: “Amazon's extension of its – by invitation only – business loan service is to be welcomed. It introduces new competition into a market that regulators have long-viewed as being short of innovation and alternative market options.
“While attention will be focused on how this offering will impact the established banks, it will be equally interesting to see how challenger banks respond. Much has been made of how these new entrants will change banking.
"Given Amazon's name, size and existing lending experience, it's approach may well set a benchmark to which other providers – both established and new – might aspire.”