Goldman Sachs Group Inc (NYSE:GS) is in discussions to use the lending platform of, Inc. (NASDAQ:AMZN) to provide loans to small and medium enterprises. It is part of the recent push into mainstream banking.

Working on software to interface with a loan platform

Goldman Sachs is reportedly working on software to interface with the existing loan platform of Amazon. If the deal goes ahead as planned, Amazon will use Goldman Sachs as the backend to provide loans. It is the second stint for Goldman Sachs. The company earlier helped the tech giant Apple to Apple Card in 2019. Apple offered loans of $2 billion using its iPhone integrated credit cards at the end of 2019. However, its algorithm attracted criticism for favoring men to offer loans when compared to women.

David Solomon showcases vision to investors

David Solomon, Chief Executive Officer of Goldman Sachs, last week gave a vision into the future of the bank to the investors. The company also plans to become banking as a service to businesses across the world. It will offer know-how and digital services across institutional, commercial, or retail banking in alliance with large corporate customers.

Risks prevail in offering loans to small businesses

Goldman Sachs expects to suffer from risks by offering loans to small businesses. However, its executives, such as Stephen Scherr, Chief Finance Officer, said the bank can manage the risks. In this respect, the company has slowed down lending to the personal loan customers of Marcus in 2019.

According to Amazon, lending is part of its services, programs, tools, and infrastructure that it offers to the selling partners (medium and small-sized businesses). The company started offering loans to small businesses in 2011. It uses an algorithm to offer loans based on the need for small businesses. The loan amount varies from $1,000 to $750,000 with their tenures are up to 12 months.

According to CNBC, Amazon has partnered with the Bank of America in 2018 to provide loans to small businesses. However, its lending is slowed down because the e-commerce giant adopts the protective measures to mitigate the risks in such lending.