Amazon.com Inc (AMZN.O) will start a business loan program for small sellers in the United Kingdom on Tuesday and is looking to launch it this year in seven more countries including China.

Until now, the e-retailer has offered the service only in the United States and Japan. Amazon Lending, founded in 2012, plans to offer short-term working capital loans in other countries where it operates a third-party, seller-run marketplace business, the head of Amazon Marketplace, Peter Faricy, told Reuters.

The countries are Canada, France, Germany, India, Italy, Spain and China, where credit is becoming a key factor in competing for new vendors and grabbing market share.

The service is on an invite-only basis and is not open to all sellers on Amazon’s platform.

Other large retailers including eBay Inc’s (EBAY.O) PayPal and Alibaba Group (BABA.K) which run third-party marketplaces, are also turning to credit to boost their vendor base.

Some lending industry officials who help lenders assess credit risk say these retailers are taking on risky loans because they do not know the credit markets in which the sellers are operating.

Small businesses have high failure rates, especially in China and India, added William Black, a former U.S. banking regulator and professor at the University of Missouri.

Amazon said it can safely offer loans based on internal data and because it takes loan payments out of the sales proceeds it pays sellers.

Amazon offers three- to six-month loans of $1,000 to $600,000 to help merchants buy inventory. It makes money on interest and takes a cut of all sales on its marketplace, which now account for about 40 percent of total Amazon site sales.

Amazon said it has offered hundreds of millions of dollars in loans since 2012, with more than half of its sellers opting for a repeat loan. The company declined to provide specific figures and also did not say how much it plans to lend this year.

Amazon’s Faricy said the company has become better at understanding the inflection points in a small or medium business where capital can make a difference.

“We know a lot about our sellers’ business and invite only those who we think are in the best position to take capital and grow,” he said.

In China, where Alibaba lends to small businesses, offering such loans is more of a business requirement, analysts said.

“Amazon has very little share in China and they haven’t been able to break out of that, so this is a very important necessary step for them to be able to grow,” said Gil Luria, analyst with Wedbush Securities in Los Angeles.

In other countries including India, where there is a scramble to expand the online shopping market, small business loans could offer a distinct competitive advantage, Luria said.

MITIGATING RISK

Online lending accounts form about 3 percent of the roughly $1 trillion of outstanding personal and small business loans in the United States.

The default rate for small businesses with credit under a $1 million stood at 1 percent in 2014 but is seen rising to 1.6 percent in 2015, as new lenders with varying ability to assess risk increase lending, according to small business credit ratings provider PayNet.

Retailers like Amazon do not have data from sellers about some markets in which they operate, and relying on internal seller company data is not enough, said William Phelan, president of PayNet.

Sellers interviewed by Reuters and writing on Amazon forums cited interest rates on Amazon loans ranging from 6 percent to 14 percent, in line with loans from banks and business credit cards.

Stephan Aarstol, chief executive of Tower Paddle Boards, an Amazon seller, said he has taken four loans from the company starting in March 2014 because of the speed and simplicity of the process. It took him five days to get his first loan.

“The problem for a small business owner is not the interest rate, it’s the availability of credit … I can’t grow fast enough,” he said.

(Editing by Matthew Lewis and Cynthia Osterman)

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