Please ensure Javascript is enabled for purposes of website accessibility

Report: Goldman Sachs Partnering with Amazon For New Small Business Credit Line Program

By Eric Volkman – Jun 11, 2020 at 10:16AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The two giants are teaming up to lend money to merchants.

In a collaboration uniting two famous names in finance and retail, Goldman Sachs (GS -3.50%) will team up with Amazon (AMZN -3.01%) to provide small business credit lines. That's according to a report Wednesday from CNBC, citing "people with knowledge of the project."

Amazon will begin offering such borrowing facilities to small business owners who list items on the big retailer's site. They are to receive solicitations from Goldman's Marcus online bank division for credit lines of as much as $1 million through Amazon's Seller Central merchant hub. According to the article, those solicited will be able to apply for the credit lines in a simple, two-step process.

Two stacks of money.

Image source: Getty Images.

The fixed annual interest rates will range from 6.99% to 20.99%. No other terms or conditions were mentioned in the article.

As the lender, the Goldman Sachs division will be the party responsible for approving and managing the credit facilities.

Amazon already has a business lending program, although this is entirely proprietary. The Goldman Sachs arrangement will be its first partnership in the segment, and the first time it has ceded decisions on such loans to an outside entity.

In addition to collecting interest and, presumably, fees on the credit lines, Marcus will also have access to data about merchants who list on Amazon. This would aid the bank in its overall decisions, and in shaping products for those users. According to CNBC, that data will be used only by consent.

Neither Goldman Sachs nor Amazon has yet made an official statement on the program, and the article did not say precisely when it will launch.

On Wednesday, Goldman Sachs' shares fell by 2.1% and Amazon's rose by 1.8%, while the S&P 500 index fell 0.5%.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Goldman Sachs Group, Inc. Stock Quote
The Goldman Sachs Group, Inc.
GS
$301.97 (-3.50%) $-10.95
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$113.78 (-3.01%) $-3.53

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.