Beyond the Alternatives: How Onramp Compares to Amazon Lending

Beyond the Alternatives: How Onramp Compares to Amazon Lending

A good lending source can make or break any business, especially in a highly competitive market. Fortunately, financing options for eCommerce businesses have become exceptionally safe bets. Unlike generic lending sources, eCom financing partners can now provide fuss-free cash injections with minimal fees on short notice. As we’ll discover, advantageous eCommerce financing options are more available than ever—but selecting the right one requires some research.

For example, Amazon Lending has lent over $800,000 million to eCommerce SMBs. It’s enabled many aspiring and established merchants to compete or develop their businesses. Still, some Amazon merchants are seeking more advantageous options, partly due to Amazon’s inbuilt timing delays, funds restrictions, and other hurdles. We’ll compare it to one of the more flexible financing alternatives available and let you decide which option works best for you.

Onramp and Amazon Lending: A Head-to-Head Comparison

Overall, Amazon Lending can be a very effective resource for those profoundly ingrained in Amazon’s selling ecosystem. To make the most of it, merchants must keep a tight routine generally based on two-week cash injection cycles. It’s far from a deal-breaker, but some merchants would prefer faster access to their cash if possible.

Amazon Lending is also invite-only, and the approval process can become complex (although less than with a bank). In some ways, the funds are restricted and can’t be used outside Amazon’s services. It’s no issue for those needing to spend a significant amount through Amazon anyway, but generally, the aspiring eCom leader will opt for fewer limitations if possible.

We’ll compare Amazon Lending’s versatile credit line, lump-sum loan, and cash advance options over Onramp’s unrestricted, adaptable, and automated cash injections.

Flexible Cash

One of the most significant differences between Amazon and Onramp is a matter of flexibility. When Amazon sellers receive funds, use is restricted to Amazon’s on-platform activities only. To fund the broader needs of your business (such as multiple sales platforms), merchants must consider alternate sources.

An argument could be made that this restriction is a non-issue. After all, heavy Amazon users must consistently spend funds through Amazon to keep their stores afloat. Yet eCommerce changes rapidly, and past success on any platform does not guarantee future performance.

For instance, what if your biggest competitor suddenly undercuts your top-selling item on Amazon? Naturally, you’ll want to allocate funds to other platforms. Onramp gives clients the freedom to spread each cash injection as they wish. As for timing flexibility, Onramp also removes the merchant’s dependence on timing delays.

Related: Amazon Payout Schedule: Everything You Need to Know

Lightning-quick turnarounds are the keystone of eCommerce, and it’s essential for your cash flow needs to follow suit. By correlating cash injections with real-time sales, merchants know precisely how much they have to work with at any given moment. Further, payments can be made based on actual performance.

As if that’s not enough, all incoming and outgoing financing is done safely and automatically in the background. If payout timing isn’t a concern for you, Amazon Lending could still hold some advantages—but we’ll go deeper into the fees, ease of use, and merchant support available through both Amazon and Onramp.

Which Has Lower Fees?

Assuming you’ve received an invitation for Amazon Lending, you still need to apply to learn the fees. It’s because Amazon offers several lending options, each with a unique fee structure and rate that can vary widely.

Depending on which Amazon Lending option you choose, you could be hit with the following fees:

  • Monthly interest repayments are around 16% for most candidates and 11–12% for select merchants, typically over 12 months. Depending on the arrangement, repayments could go solely to interest, meaning the total repayment will be higher.
  • Fixed-rate interest for a business credit line. Here, rates don’t increase (like with a credit card), often anywhere from 7% to 21%.
  • Fixed capital fees through Amazon’s new merchant cash advance (MCA) arrangement. Here, Amazon takes a percentage from each sale. Amazon’s rates align with most stand-alone MCA providers, where 9% is considered lucky. The rates could vary widely depending on the applicant.

The latter is a step in the right direction. It’s an excellent alternative to long-term monthly interest payments if the rate is low.

Let’s say you get an attractive rate through Amazon’s MCA arrangement. Be advised that fee deductions occur independently of the following cash advance, often separated by significant periods. It’s standard practice, but more specialized eCom financing options can still go one better.

For example, Onramp’s fees happen in lockstep with each cash injection. Merchants are always clear on how much cash they’ll have at any moment. As for Onramp’s fees, they usually come out to about 1% of each sale. It’s an unprecedented rate by even the highest standards. How is this possible?

Onramp only makes money when their merchants do, meaning they’re guaranteed a profit when their partners succeed. It doesn’t require extensive risk management, significantly raising costs for traditional lenders and MCAs. Instead, the merchant and financing partner is on the same page and share the exact measures of success.

For Onramp, there’s little-to-no loss if a merchant partner’s sales drop and the sole focus is helping clients succeed. Merchants often feel deeply empowered, being finally granted the trust eCom entrepreneurs so often report lacking during initial growth stages.

It also establishes a powerful simplicity. Onramp’s fully automatic fee collection creates a seamless merchant experience, providing more of the essential business asset: more time to focus on company growth rather than vendor relationships.


For those in the early stages of their eCommerce career, Amazon might be off the table by default. Most of their lending info is held strictly behind member signup, and the fine print isn’t easy to come by if you want to review it ahead of time.

It means looking deeper into Amazon’s lending options requires investing significant time into becoming a successful Amazon seller. What about those undecided about which platform to pour their efforts into? New entrepreneurs will have a hard time comparing Amazon Lending with the alternatives—and their underwriting process is likely becoming tougher.

By contrast, applying to Onramp is open to all. Because it’s platform-agnostic, merchant partners receive a simple funding source that works with the broadest possible range of sales platforms. Onramp also offers a lending suite for Amazon Sellers, approaching the specialized nature of Amazon Lending while allowing clients to apply funds where they please.

Related: The Best Free Amazon Product Research Tools

Onramp also takes a multi-channel approach. That means, your funding decisions are not solely based on the performance of your Amazon store. Instead, merchants who offer their goods through different channels or platforms will have their entire sales history included for a holistic view of their business. Even better, the funds received don’t need to be used solely for their Amazon business. Since Onramp is platform-agnostic, so is your cash flow.

Risk Management

Amazon Lending may provide higher lump-sum payments with specific options—but at what cost? Understandably, this involves higher fees, meaning potentially more significant risk.

As far as collateral, Onramp doesn’t require any. That’s only partly true for Amazon’s MCA program. Approved merchants grant Amazon more significant control over their sellers’ accounts even then. Essentially, the following are treated as a kind of collateral:

  • Seller account funds
  • Affiliate payments
  • Inventory held in fulfillment centers

Application Process & Customer Support

What about the application itself? Only some Amazon Lending options don’t require a credit check. For example, Amazon’s more traditional loans require a similar screening process to standard bank loans.

Because Onramp works with much less risk, we don’t require credit checks or proof of personal financial health. With solid evidence of sound business performance, Onramp has confidence that whatever successful applicants are doing, it must be working. You can say goodbye to catch-22 prerequisites or complicated application timelines.

Onramp’s online portal makes the approval process fast and easy; most applicants receive an answer in just minutes. As an SMB ourselves, we value the human touch, offering live agent assistance so applicants can fully satisfy their questions before making a decision.

The Takeaway

Amazon Lending provides sellers several lending options that work well within the Amazon platform. Funds come with limitations, however, which may not work for those operating multiple platforms. Onramp’s cash injections are free to use in various capacities, even outside the selling environment.

Onramp is also much easier to manage and has lower fees. Instead of following payment plans and maintaining extensive records, the Onramp app integrates smoothly into the merchant’s seller account—even multiple accounts, if applicable.

It’s streamlined and automated that merchants only need to check their balances to verify the amounts. They go on about their business with precisely the cash anticipated, knowing the fees are automatically deducted only when they can pay.

Simplify Your eCom Financing With Onramp

The right eCommerce financing partner can dramatically boost revenue and protect margins without disrupting workflow. With streamlined financing options like Onramp, it’s unlikely the eCom leaders of tomorrow will be swayed by less than ultimate flexibility, simplicity, and ease from their financing partners.

Many are interested in ramping up their online sales performance but are wary of financing options that seem less adaptable to their moment-to-moment needs. Onramp is different and fast becoming the go-to choice for simple, effective, and affordable eCom financing solutions.Take the most meaningful action to expand your business today, and get an offer from Onramp. You’ll work alongside your financing partner with a mutual aim and maximum advantage—all without giving up control of your business or risking personal finances.