Parafin Cash Advance - Avoid At All Costs
Greetings fellow sellers,
We've been in business here on Amazon over six years. Over that time we have taking out several Amazon Lending Loans. We have been pretty happy with those loans and when Amazon offered us a Parafin "Cash Advance" we figured we would give it a shot. Big mistake. We were offered 50k but the rates are pretty high. We settled for 20k with a $2300 fee. We were lead to believe this "advance" would be paid back over a period of 9 months by a 6% deduction from our payouts.
First of All, it's pitched as a cash advance of your bi-weekly payout. After a few weeks we realized they were taking money every week. We called to complain but couldn't speak with anyone who could do anything about it. A few days latter we got an email saying that we were being switched to bi-weekly.
Then there is a matter of the percentages. These people seem like they take whatever they want out of your account whenever they want. Like I said, we were lead to believe they were "advancing our payout", but from what I can gather it looks like they may be taking a percentage of gross sales, not net, which isn't really our "payout" . Even then the numbers aren't quite adding up. Remember that 6% I referenced? Well, our last payout they debited a little over 20% from our checking account.
We are two months into what was supposed to be a 9 moth repayment schedule. In those two months the loan is over 50% paid off! At this rate it will be paid off in 3- 4 months? Think I'll get a reduction on that $2300 fee? I wouldn't hold my breath. Even though it was really high, I decided I could deal with a $2300 fee for 9 months. But 3-4? That's absolutely ridiculous and I never would have consented to that.
Before accepting the advance I searched the forums about them but I couldn't find much. I guess I figured we have had such good experiences with Amazon Lending that we would give them a chance based off of that. So I figured I would share our experience here in case anyone else in the future is considering doing business with them and trying to research. If you have an offer from Parafin let it expire. You'll probably have an offer from Amazon Lending soon after.
Parafin Cash Advance - Avoid At All Costs
Greetings fellow sellers,
We've been in business here on Amazon over six years. Over that time we have taking out several Amazon Lending Loans. We have been pretty happy with those loans and when Amazon offered us a Parafin "Cash Advance" we figured we would give it a shot. Big mistake. We were offered 50k but the rates are pretty high. We settled for 20k with a $2300 fee. We were lead to believe this "advance" would be paid back over a period of 9 months by a 6% deduction from our payouts.
First of All, it's pitched as a cash advance of your bi-weekly payout. After a few weeks we realized they were taking money every week. We called to complain but couldn't speak with anyone who could do anything about it. A few days latter we got an email saying that we were being switched to bi-weekly.
Then there is a matter of the percentages. These people seem like they take whatever they want out of your account whenever they want. Like I said, we were lead to believe they were "advancing our payout", but from what I can gather it looks like they may be taking a percentage of gross sales, not net, which isn't really our "payout" . Even then the numbers aren't quite adding up. Remember that 6% I referenced? Well, our last payout they debited a little over 20% from our checking account.
We are two months into what was supposed to be a 9 moth repayment schedule. In those two months the loan is over 50% paid off! At this rate it will be paid off in 3- 4 months? Think I'll get a reduction on that $2300 fee? I wouldn't hold my breath. Even though it was really high, I decided I could deal with a $2300 fee for 9 months. But 3-4? That's absolutely ridiculous and I never would have consented to that.
Before accepting the advance I searched the forums about them but I couldn't find much. I guess I figured we have had such good experiences with Amazon Lending that we would give them a chance based off of that. So I figured I would share our experience here in case anyone else in the future is considering doing business with them and trying to research. If you have an offer from Parafin let it expire. You'll probably have an offer from Amazon Lending soon after.
43 respuestas
Seller_CW0P5hgbsiqWX
No need to answer except to yourself.
After 6 years of selling, are you living on the profits earned on the Site by paying yourself a salary? Do you sell FBA or FBM? Do you buy advertising? With your loans, are you inventing in new products to sell, or simply buying the same thing? Are you taking all of your earned profits and reinvesting in your business, or are you taking from those profits and using them for personal expenses, removing them from your business?
Are you giving more of your profits to others that you are keeping for yourself?
Seller_pAySCaVFlzKzW
Revenue based lenders who are connected to your Amazon account will typically take a percentage of your gross sales before Amazon fees, and sometimes even your taxes collected. Which would explain the discrepancy. Cash advance type deals are normally not a good thing to take before a period of large sales. They are generally better to take during periods of low sales in my opinion. Most cash advances have a clause called reconciliation which allows you to get a refund on any payments you made to them which exceed the specified percentage they said they would take in revenue. For example, they normally will set a biweekly fixed payment, say 1000$ biweekly. At your remittance rate that would mean you would need to do 33k a month in sales. If you only did 20k, you would call up the lender and provide your documentation showing you only grossed 20k, and they would refund you 800$ that you paid.(Because 6% of 20k is 1,200$ and your fixed payment schedule had you remit 2k in a month). Cash advance and revenue based lenders are also typically able to offer deferrals and reduced payments for a period of hardship as well moreso than bank lenders, which is another benefit. Make sure you understand the way your financing works before you accept it and always read the contract front to back or have a lawyer read it. Cash advances should typically be a last resort option in my opinion. However if you do long term business with a cash advance company they will actually start throwing you sweet deals better than bank lending after they trust you. But it’s important to understand exactly what you’re getting into because they all have higher than typical fees, and there are many straight up loan shark cash advance lenders. They are essentially the payday lenders of business. They will also put Leins on your business and blanket UCC liens on your assets even if you don’t miss a payment so watch out for that. When you have a UCC Lien you will get endless calls from other cash advance lenders and traditional as well as bank lenders will shy away from offering you financing.
Seller_zzsb4ImRmPL9r
They actual do refund! I took out a small one to get rolling when I first started, they refunded over half the fee back since it was paid off so quick.
Seller_W8zW4X13SQyoz
trust me you are not the only. Parafin's customer service is next to zero. We got a loan from them for 9 months, so I thought. They debited our bank account every week, and when I made a complaint to them they said you availed the revenue based loan. I told them I am better off using my credit card, than your company.
Amazon needs to cut ties with them. They are straight up a scammy company.
Seller_A9AaBvcpDrTIQ
These guys are so incredibly bad . Same exact scenario for me! They took out a way bigger percentage and they asked for documentation and I sent it over and they said they can’t see what I’m talking about. Everything was there so even a child could read it. Funnier thing, Amazon lending advertised it as “the percentage of every Disbursement” like 2 months ago and now it just says the “the percentage of every sales”. They changed the wording and o got the screenshots to prove it!
Seller_YHvB6J9WkbFoQ
I've had the exact same, terrible experience with Parafin. My last Parafin payment was ~50% of my AMZ disbursement! Crazy!
Seller_oDXVaydIpi3Hi
I'll second everything you said. They have been charging every week, zero updates on when they will charge or how much. Numbers dont match. They told us after dozens of complaints they would communicate. Got an email stating they were taking one amount. 4 days later we got a default email stating they tried to take over 3xs the amount.
Seller_FiswKMx7uPaJ8
Think 90% of people who take the loan expect it to be like an Amazon loan that just takes one amount per month. When we took our loan from them, everytime we checked the account another amount was removed. It's very predatory, and I feel bad for those that take out the loan to grow their business only to find they are suddenly struggling with balancing their account.
Seller_RTlQJrZ51M2XI
Same here. Took a $80,000 loan at 15%. They were doing weekly and then biweekly. They are taking it off gross sales. They have taken more than what Ireceive had received from Amazon. They do not take it out when you received your money from Amazon. 9 months not so. They have taken out a little over $40,000 in 2 months. It is killing me
Seller_3f98Jl634dDWw
100% AGREE!!!!!!!!!!! I am NOT impressed with their methods. THANKFULLY I don't have a loan that large, but a couple grand is STILL a pain when they deduct "whenever they want" and they don't care when and if you get payouts....so it's not even convenient or logical to use with Amazon sellers. Mine said a 6 month payoff and it's almost 100% paid off in a month. LOL It's a hassle. HASSLE. I'll NEVER use it again. I suggest you stick with the Amazon Lending directly as those are WAY WAY more convenient and reasonable in all ways.
