Members of the UK200Group of independent accountancy and law firms have commented on news that online retailer Amazon is to launch Amazon Lending tomorrow (30 June). It will offer loans to small and medium-sized companies that trade goods via Amazon’s Marketplace division for third-party sellers. Amazon Lending will initially be by invitation-only but the company has not ruled out expanding the service.

Duncan Montgomery, Tax Partner at UK200Group member firm Whittingham Riddell LLP:

This sounds like good news and will certainly raise Amazon’s profile. While more choice is better, the size of loans sounds like it will be aimed at micro to small business. They are in a unique place to judge cash flow and volume of sales, so have an information advantage over traditional banks in that regard. Whether they can harness that information is a different question.

 Jonathan Russell, Partner at UK200Group member firm ReesRussell:

 Amazon’s suggestion that it will lend money to its suppliers is no great surprise and is another way to tie the supplier in to them. This is something which PayPal have done and was originally a reduction in the funds withheld to manage disputes and no doubt Amazon will initially be doing something similar and coupling it with the loan facilities available to many traders who accept card payments. To have more ‘hooks’ into the supplier is good business sense for Amazon.

David Whiscombe, Director of Tax at UK200Group member firm BKL:

It will be interesting to see if this lending is done through a UK tax-paying company or if Amazon will be unable to resist the temptation to create arcane offshore structures to avoid the inconvenience of paying UK tax on the interest.

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Established in 1986, UK200Group is the leading mutual professional association in the UK with some 150 offices of quality-assured member accountancy and lawyer firms throughout the UK totalling over 550 partners, 150,000 business clients and global links in over 50 countries. UK200Group provide services and products that are designed to enhance the business performance of its members.  Telephone 01252 401050, email admin@uk200group.co.uk or visit www.uk200group.co.uk 

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 UK200Group is an association of separate and independently owned and managed accountancy firms and lawyer firms. UK200Group does not provide client services and it does not accept responsibility or liability for the acts or omissions of its members.  Likewise, the members of UK200Group are separate and independent legal entities, and as such each has no responsibility or liability for the acts or omissions of other members.

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