Goldman Eyes Offering Small-Business Loans in Deal With Amazon

(Bloomberg) -- Goldman Sachs Group Inc. is in discussions with Amazon.com Inc. to offer small-business loans through the tech giant’s platform, according to a person with knowledge of the matter.

• The move marks another chapter in the Wall Street firm’s efforts to seek new lines of business to boost revenue outside its traditional strengths of trading and investment banking.

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• Should the two companies reach a deal, Goldman will be adding itself to Amazon’s lending platform, which has been in place for years and is used as a way to strengthen the online retailer’s ties with small-business clients. The loans are used mostly to provide merchants on the Amazon.com website with funding to procure inventory.
• The plans fall in line with Goldman’s bid to diversify, which already includes new saving accounts, unsecured loans for customers and a high-profile partnership with Apple Inc. on a co-brand credit card.
• Goldman is fresh off its investor day, when it made a pitch for embracing the bank model as it reorients to a new reality in which old growth engines such as trading don’t guarantee it the same standing at the top of Wall Street as they once did.

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• Expect Goldman to roll out more products and services as it seeks new incremental lines of revenue. The firm laid out a goal of boosting return on equity to more than 13% in the next three years, up from the 11.5% it posted in 2019, excluding litigation costs.
• The Financial Times reported on Goldman’s talks with Amazon.com earlier Monday. A spokesman for Goldman declined to comment. An Amazon representative didn’t immediately respond to a request for comment.

--With assistance from Jenny Surane and Molly Schuetz.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Steve Dickson

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