• Amazon economists expect its seller lending volume to roughly double this year.

• Amazon's lending business has rebounded in recent years after scaling back during COVID.

• It still expects to tighten the underwriting process as repayment rates are expected to drop.

Amazon is expecting to roughly double its loans to sellers in 2023, though its underwriting process could get more stringent, Insider has learned.

Amazon's lending program is part of a broader business to business payments and lending team, known internally as ABPL. The group also offers other services, like invoice financing to sellers and co-branded credit cards.

The company's economists are forecasting that third-party sellers will owe it over $2 billion over the next year, according to internal document obtained by Insider. That's an over 80% increase from the first quarter of last year's $1.1 billion in outstanding loans. And it's more than double the balance Amazon reported at the end of 2021, when it reached $1.0 billion in total outstanding loans for the first time.

But Amazon plans to tighten its underwriting and credit management policies as it anticipates further macroeconomic headwinds into 2023, the document said. Of the $2 billion-plus outstanding loans projected for this year, Amazon expects a 1.34% loss rate.

"The increased uncertainty of business repayment ability" by sellers "necessitates higher inspection of our on-balance sheet credit/lending products," according to the document.

The potential growth in loans signals a continued rebound of Amazon's lending business. Amazon's invite-only lending program to sellers, which launched in 2011, significantly scaled back during COVID, reducing the total outstanding loan balance to under $400 million at the end of 2020, company filings show.

The lending activity reaccelerated over the past two years, however, and closed the most recent quarter with $1.4 billion on the balance sheet. The documents also said Amazon's lending arm served over 1 million customers and sellers in 2022, reaching a total transaction volume of $50 billion that generated more than $1 billion in "economic profit," the document said. It's unclear how it defines economic profit.