Goldman Sachs, which has a structured credit division that offers auto finance and finance leasing, is in talks with Amazon over a deal that would see the US investment bank offer loans to SMEs in the US, according to a report in the FT.
Goldman is the US’s fifth-largest bank by total assets with $925bn (£710bn; Euro£852bn) in 2019, according to S&P Global Marketplace.
Meanwhile, the US represents the largest leasing market in the world, especially since stock market bulls have dominated investor sentiment in the US over the last decade.
The US was responsible for $410.35bn in leasing volume, according to the White Clarke Group Leasing Report for 2019. North America recorded new business volumes of US£445.9bn (£342.4bn), the WCG report said.
The deal with Goldman Sachs would target loans to SMEs across Amazon’s lending platform, the FT report said. Goldman is currently in the process of shifting its business model away from being purely a trading and investment bank to offering a wider array of financial services.
Meanwhile, Amazon is also looking to diversify its online marketplace and cloud computing business to charging its customers “for a host of commercial services offered to other companies,” the FT reported.
Goldman Sachs is also understood to be pursuing “banking-as-a-service” as a new line of business, which would see third parties ‘white label’ Goldman Sachs built products and financial services.
If Goldman Sachs is looking to develop its SME and lender finance offerings, there is evidence to suggest this might involve tie-ups with auto finance companies down the road, both in the US and China.
- Earlier this month it was reported that Goldman Sachs had granted a $10m (£7.7m) loan to On the Road Lending, an auto financier based in Dallas.
- In March 2019, the FT reported that a failure to get in auto financing early enough may have contributed to troubles at Renrenche, a Chinese online used car trading startup backed by Tencent and Goldman Sachs.
- In 2017, MUSA Auto Finance, a Texas-based auto finance company specialising in new and pre-owned vehicle leasing, reported that it had entered into a £125m (£95m) warehouse facility with Goldman Sachs.