The Biggest Small Business Funders

Although all of the specific data isn’t entirely available, we’ve compiled a short list of who the largest small business funders were in 2023:

1. Square
2. Enova
3. PayPal
4. Shopify
5. Amazon
6. Intuit
7. Parafin

Amazon’s Business Loan Program Relatively Flat, And The Company is Now Possibly the Largest MCA Broker?

Amazon’s seller lending program, in which the company extends working capital loans to Amazon sellers to buy inventory, has been somewhat flat this year. Its seller lending receivables in Q3 were unchanged from Q1, coming in at $1.2B. It had briefly gone up in Q2 to $1.3B.

Amazon rarely mentions its seller lending business which is but a blip compared to the $143B in net sales the company recorded in just the third quarter. Despite all this cash, Amazon relies on a $1.5B secured revolving credit facility with a lender in the same way many small business lenders do to facilitate this amount of loan volume.

AltFinanceDaily has been tracking the company’s seller lending receivables balance since 2016.

Amazon’s separate merchant cash advance program is not counted as part of their selling lending program. Amazon partnered up with Parafin in November 2022 to offer MCAs to their clients. One consequence of that is that Amazon sellers talk publicly in the company’s Seller Central forums and this has been no exception. There, most mentions of Parafin have so far been less than flattering.

Much of the confusion reported by sellers is centered around the percentage collected from each sale. Unlike most MCA funding companies, which either withhold a percentage of card sales or debit a fixed daily amount that can later be trued-up upon request, Amazon was previously collecting its percentage “based on whether a seller had received any disbursements, automatic or manual, in the prior week.” However, that changed this past August, according to Amazon who published the following note in their forum:

Payment is deducted from your bank account based on your current Amazon disbursement schedule. If you receive disbursements weekly, payments for your cash advance will be deducted weekly. If you receive disbursements bi-weekly, payments for your cash advance will be deducted bi-weekly. In instances where Amazon sales data is delayed in reaching Parafin, Parafin combines the payment amount with the subsequent payment to avoid debits happening on unexpected days of the week. Sellers whose payments are impacted by these instances receive emails from Parafin detailing the expected payment dates and adjusted amounts.

…

“Your merchant cash advance will be paid off automatically over time as you make successive sales-based payments. Because your offer is determined in part by your past business performance, our estimate is that you’ll pay your merchant cash advance within the estimated timeframe stated when you accepted it. If your sales ramp up or slow down, your payment amounts (and therefore the estimated payment period) may ramp up or slow down with them. The payment rate itself will not change and is a fixed percentage of monthly sales.”

Although there is some irony to Amazon playing the role of MCA broker and MCA customer service, Amazon also refers its loan-interested sellers to Lendistry and Marcus by Goldman Sachs. All of this activity started late last year just as Amazon was on pace to max out its own credit facility with its own lending program. Since then, the company’s flat business loan receivable balance might suggest that Amazon’s seller financing business is actually growing, just not on its own balance sheet since its brokering the deals out.

So who’s the biggest MCA broker in the US? Amazon generated $514B in net sales in 2022. $1B in MCA deals wouldn’t be so hard for a company already doing about a billion a year in loans. It would be quite ironic to discover that the biggest MCA broker in 2023 was Jeff Bezos, but it’s a real possibility.

All Registered Sales-based Financing Providers in Virginia (As of 3-29-23)

Is the revenue-based financing provider you do business with registered to operate in Virginia? On July 1, 2022, Virginia’s commercial financing disclosure law went into effect and with that the necessity to register one’s business. As of March 29, 2023, 101 companies had registered. This is the official list of registered sales-based financing providers as of that date (yellow means it has been added since our last update):

• Advance Servicing Inc.
• Accredited Business Solutions LLC dba The Accredited Group
• Advance Funds Network LLC dba Advance Funds Network
• AdvancePoint Capital LLC dba advancepoint
• Ally Merchant Services LLC
• Alpine Funding Partners, LLC
• Business Capital LLC
• Byzfunder NY LLC dba Tandem dba Nano-FI
• Bridge Capital Services, LLC
• CFG Merchant Solutions, LLC
• Clarify Capital II LLC dba Clarify Capital
• Cloudfund VA LLC dba Cloudfund LLC
• Capflow Funding Group Managers LLC
• Clear Finance Technology (U.S.) Corp. dba Clearco
• Coast Premier LLC dba Coast Funding
• Commercial Servicing Company, LLC
• Corporate Lodging Consultants, Inc.
• Crown Funding Source LLC dba Crown Funding Source
• Diesel Funding LLC
• Direct Capital Source Inc.
• Dealstruck Capital LLC
• EBF Holdings, LLC
• Essential Funding Group Inc
• Errant Ventures LLC
• FC Capital Holdings, LLC FundCanna
• Fidelity Funding Group LLC
• Front Capital LLC
• Finova Capital, LLC
• Fintegra, LLC
• First Data Merchant Services LLC
• First Path Capital Ventures LLC dba First Path Capital
• FleetCor Technologies Operating Company, LLC
• Flexibility Capital Inc.
• Fora Financial East LLC
• Forward Financing LLC
• Fox Capital Group Inc.
• Fundamental Capital LLC
• Funding Metrics, LLC dba Quick Fix Capital
• Good Funding, LLC
• Granite Merchant Funding, LLC
• Invision Funding LLC
• Itria Ventures LLC
• Jaydee Ventures, LLC dba 1 West Capital dba 1 West Commercial
• Kapitus LLC
• Knight Capital Funding III, LLC
• Lexington Capital Holdings Ltd
• LG Funding LLC
• Legend Advance Funding II, LLC dba Legend Funding
• Liberis US Inc.
• Libertas Funding, LLC
• Liquidibee 1 LLC dba Liquidibee LLC dba Altfunding.com
• Loanability, Inc.
• Millstone Funding Inc.
• National Funding, Inc.
• Nav Technologies, Inc.
• Orange Advance LLC
• Pearl Alpha Funding, LLC
• Pearl Beta Funding, LLC
• Pearl Delta Funding, LLC
• Proto Financial Corp.
• PWCC Marketplace, LLC
• Parafin, Inc.
• PayPal, Inc.
• Payability Commercial Factors, LLC
• Pinnacle Business Funding LLC dba Custom Capital USA dba EnN OD Capital
• Platform Funding LLC
• Prosperum Capital Partners LLC dba Arsenal Funding
• QFS Capital LLC
• RFG USA Inc.
• Rival Funding, LLC
• Riverpoint Financial Group Inc.
• Rocket Capital NY LLC
• ROKFI LLC
• Ruby Capital Group LLC
• Rapid Financial Services, LLC
• Reliant Services Group, LLC
• Retail Capital LLC dba Credibly
• Revenued LLC
• Rewards Network Establishment Services Inc.
• Secure Capital Solutions Inc.
• Sky Bridge Business Funding, LLC
• SMB Compass LLC dba SMB Compass
• Sunrise Funding LLC
• Santa Barbara Tax Products Group, LLC
• SellersFunding Corp.
• Sharpe Capital, LLC
• Shine Capital Group LLC
• Shopify Capital Inc.
• Shore Funding Solutions Inc.
• Streamline Funding, LLC
• Stripe Brokering, Inc.
• The LCF Group, Inc.
• Unique Funding Solutions LLC
• United Capital Source Inc.
• Upfront Rent Holdings LLC
• Upper Line Capital LLC
• Vader Servicing, LLC
• Velocity Capital Group LLC
• Vivian Capital Group LLC
• Vox Funding, LLC
• ZING Funding I, LLC

Amazon’s Business Loan Trajectory

According to documents purportedly obtained by Business Insider, Amazon plans to increase its business loan operations in 2023, estimating that loan receivables will eventually exceed $2B. Insider also says that its expected loss rate is 1.34%.

The receivable figure would not be all that surprising as Amazon as been on a steady trajectory upwards over the last decade with the exception of 2020 when covid struck. Its receivables reached $1.4B in Q3 2022. The year-end figure has not yet been released. $2B+ for 2023 would be in line with the historical trend.

2016: $661M
2017: $692M
2018: $710M
2019: $863M
2020: $381M (covid)
2021: $1B
2022 (Q3): $1.4B

Not counted in these figures is financing to Amazon sellers conducted through a third party. Amazon recently teamed up with Parafin on merchant cash advances, Lendistry for Business Loans, and Marcus for lines of credit, for example. Data on funding from these parties is a little more difficult to come by.