Parafin - good option for cash advance
Just our two cents re: Parafin, as I've seen some horror stories on here and wanted to offer our own personal rebuttal. We are currently on our 3rd cash advance with Parafin, and so far everything has been smooth sailing. Nothing is really hidden, and if you read what you are getting into, it's all right there. As an example, let's say you get an offer for a 10K cash advance. These usually come with the caveat that you pay an additional $1K (ballpark figure, could be $1.5K) as a service fee, so once you accept, you will get $10K deposited into your bank account quickly (but will have to pay back $11.5K eventually). So, this additional $1.5K seems like a lot, but how else is Parafin supposed to just advance you so much money without some kind of fee/interest? It's all spelled out in the contract you agree to.
How fast you pay back the $11.5K is entirely predicated on your sales. Parafin takes 15% of gross sales each disbursement, until you have paid back the $11.5K in full. If you sell a ton one cycle, you could pay it back quickly and then get offered a new cash advance...if you have several cycles of little to no sales, it will obviously take a longer time. But Parafin isn't taking anything in addition to the $1.5K fee, from my example. They do take 15% of gross sales, not net, so if you're gross sales are $2K one cycle, but your net sales are just $1300, Parafin would take $300 from your bank account that disbursement (15% of 2K)...so, your actual take home that cycle would be $1300-$300= $1K. That may seem like a big chunk, but it's why you got the cash advance to begin with, and the faster you pay it off, the faster you are done owing Parafin anything. Besides, the $700 difference between gross and net sales can be written off when it comes to taxes.
Again, everything is spelled out, so I get it when I see sellers upset with Parafin, but they really aren't taking anything more than what they say they are going to take. I have noticed they will take 15% of gross sales each week (even though my Amazon disbursement schedule is every 2 weeks), but this really doesn't change what they are taking...it just means you need to be aware of what you have in your checking account to make sure you can cover the charge from Parafin each week.
All in all, if you receive a Parafin offer and really need some upfront cash to buy more inventory, etc., I truly believe Parafin is a good way to do it. Some people would argue that the APR is high when considering you are still paying the $1.5K fee even if you pay off the loan in a few months...I get that, but if you are paying off the loan that quickly, that also means your business is going good in my opinion (so we are willing to deal with the higher APR). The APR would be 15% if I took a year to pay off my loan, but then that would mean my sales were likely very low, so that wouldn't be great either. I would rather have a higher APR and pay back the loan fast, because that means my business is thriving.
Parafin - good option for cash advance
Just our two cents re: Parafin, as I've seen some horror stories on here and wanted to offer our own personal rebuttal. We are currently on our 3rd cash advance with Parafin, and so far everything has been smooth sailing. Nothing is really hidden, and if you read what you are getting into, it's all right there. As an example, let's say you get an offer for a 10K cash advance. These usually come with the caveat that you pay an additional $1K (ballpark figure, could be $1.5K) as a service fee, so once you accept, you will get $10K deposited into your bank account quickly (but will have to pay back $11.5K eventually). So, this additional $1.5K seems like a lot, but how else is Parafin supposed to just advance you so much money without some kind of fee/interest? It's all spelled out in the contract you agree to.
How fast you pay back the $11.5K is entirely predicated on your sales. Parafin takes 15% of gross sales each disbursement, until you have paid back the $11.5K in full. If you sell a ton one cycle, you could pay it back quickly and then get offered a new cash advance...if you have several cycles of little to no sales, it will obviously take a longer time. But Parafin isn't taking anything in addition to the $1.5K fee, from my example. They do take 15% of gross sales, not net, so if you're gross sales are $2K one cycle, but your net sales are just $1300, Parafin would take $300 from your bank account that disbursement (15% of 2K)...so, your actual take home that cycle would be $1300-$300= $1K. That may seem like a big chunk, but it's why you got the cash advance to begin with, and the faster you pay it off, the faster you are done owing Parafin anything. Besides, the $700 difference between gross and net sales can be written off when it comes to taxes.
Again, everything is spelled out, so I get it when I see sellers upset with Parafin, but they really aren't taking anything more than what they say they are going to take. I have noticed they will take 15% of gross sales each week (even though my Amazon disbursement schedule is every 2 weeks), but this really doesn't change what they are taking...it just means you need to be aware of what you have in your checking account to make sure you can cover the charge from Parafin each week.
All in all, if you receive a Parafin offer and really need some upfront cash to buy more inventory, etc., I truly believe Parafin is a good way to do it. Some people would argue that the APR is high when considering you are still paying the $1.5K fee even if you pay off the loan in a few months...I get that, but if you are paying off the loan that quickly, that also means your business is going good in my opinion (so we are willing to deal with the higher APR). The APR would be 15% if I took a year to pay off my loan, but then that would mean my sales were likely very low, so that wouldn't be great either. I would rather have a higher APR and pay back the loan fast, because that means my business is thriving.
5 respuestas
Seller_L4mc9uax2MoSW
OK, but at 15%, you are approaching credit card levels of interest. And a credit card you can pay off at anytime to avoid further interest payments. So theoretically, if you knew you could pay the loan off in 3 months, even if the rate was 25% annualized, it seems to me a credit card would be cheaper. Also, you might want to look into talking to a local bank about a SBA loan because they may offer better terms (rate and payoff schedule).
Anyway, I do thank you for your candor and explanation of your experience.
Seller_oEw5wUNHgJxxP
Thank you for your point of view I appreciate that. And thank you to @Seller_L4mc9uax2MoSW for your input. I agree.
For us we just paid off our last Amazon loan 15 days ago since they do not offer them anymore.
Too bad, since they had reasonable interest rates, you could pay them off early and they were simple to apply for and get approved.
Still, nice looking forward to our bi-weekly payment without any loan payments.
Seller_oDXVaydIpi3Hi
You are the first person I've ever heard of having a good experience. We had repeated horrible experiences with them as have hundreds of other sellers we know.
Seller_QAgIq5btOI9dk
Ive never heard a good thing about them. Most sellers say that parafin will withdraw from their account multiple times a week with no rhyme or reason
Seller_ShEjIiK61nFnr
This is Amazons way to get more money from our own money, by holding insane amounts in
this new delivery date differed transactions, and then trying to get your to borrow your own money,
instead of paying you how they used to.
Waiting 3 to 6 weeks to get paid from a transaction is absurd, its amazons way of loaning your own money
back to you at 15 percent. WHat the heck?
No thanks, maybe one day they will change this back, but for now, they are trying to loan your own money back to you at 15 percent, because they are holding everyones money hostage at this point, and it should be illegal to do this.
Loan sharks at best.
