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In his shareholder letter 2yrs ago, Amazon CEO Jeff Bezos said he was looking to team up with banks that could help his company expand its lending program for small businesses. Amazon Lending, which launched in 2011 has now chosen to partner with Bank of America. Partnering with B of A allows Amazon to reduce its risk and provides access to capital. A good reminder that running a great lending business is hard.
"It starts to become a return-on-capital question," he said. "Do I lend money and make a few percent on that capital invested, or do I take that capital and plow it into something like Whole Foods, which could give you a much higher return?" Still, sources told CNBC that lending is likely to pick back up now that Amazon has a banking partner. Additionally, Amazon's lending team started sending out a newsletter in November promoting its program for the first time.
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