American Express (AMEX) Business Line of Credit Review | eCommerce Seller & Small Business Friendly

The AMEX Business Line of Credit can be a valuable and inexpensive tool for ecommerce businesses to finance inventory purchases and handle necessary bills. It is a great alternative to taking a loan from Amazon, Shopify or PayPal.
Here's is where to learn more and apply: www.americanex...
Learn:
👉 The qualification criteria
👉 How to apply
👉 Unique benefits of this loan
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[@berlusmafia]

I disagree the APR is skyhigh!. Are you paid referral fees to promote this?

[@LedgerGurus]

We are not getting paid on this loan, but it is a better option than most for ecommerce and many other businesses. You are correct that this is not a cheap loan, but there aren't many great options in 2024. Let's do some comparisons. We have a business that is getting a fixed fee rate of 3% on a 6-month loan with the AMEX Business Line of Credit. That translates to an effective APR of 14.7%. Now, take a look at a revenue-based loan from Shopify. The numbers there are opaque due to the structure of the loan. The same business is currently being offered $32,000 with a 10% of daily sales payback. Our estimate is that loan would take 6-7 months to pay back putting the effective APR at 44-49%. Most other revenue-based loans are going to have similarly high rates. Now compare a bank Line of Credit. Wells Fargo has two Unsecured Line of Credit Options: www.wellsfargo.com/biz/business-credit/lines-of-credit/ Their rate for new businesses is 14.25% as of May 2024 and for businesses with 2 years with them it starts at 10.25%. The AMEX rate isn't great, but it's not terrible. Plus, the terms and fee structure is really good. We would love to hear about great options if you have them. Share away!

[@berlusmafia]

@@LedgerGurus thank you for your nice answer. I just wish there were some transperancy regulations that impose lenders to show the APR. Using fees instead of rates is a way to confuse and to make harder to compare and understand. In Europe there are laws that impose the lender to be transparent. (Bank transperancy law is made to enhance competition). I have recently applied for SBA loan, if you like, i will be glad to let you know what I have found out. If approved i will review the conditions of the loan

[@LedgerGurus]

@@berlusmafia We totally agree. Many non-traditional lenders (especially in ecommerce) tend to obscure the costs through complex structures. An ABA loan is a good, and sometimes best, option for a business. We hope you qualify!

[@halalaffirmations]

Question- for affiliate nexus or click-through nexus is that related to affiliate links like Amazon associate?

[@LedgerGurus]

Here's a good article about that: www.taxconnex.com/blog-/understanding-affiliate-nexus-and-other-forms-of-physical-presence

[@teacell]

So for the AMEX line of credit let us say for 6 month term... Are you paying interest daily on the amount you owe or do you have 6 months to pay it before interest is added? Thanks.

[@LedgerGurus]

Interest is calculated and you pay back monthly at a fixed interest rate/ principal amount.

[@shanesmith6941]

You called this a line of credit, but you explain it as a loan. There is a difference. It doesn't appear that you understand the difference.

[@LedgerGurus]

Sorry if using loan and line of credit interchangeably is confusing. In the AMEX tool, it says Select loan amount so we used those terms accordingly.

[@halalaffirmations]

Also, please do a video tutorial on how to report TikTok Shop earnings on Quickbooks! Thank you.

[@LedgerGurus]

Thanks for the idea!