Hundreds of Amazon sellers have complained that the online marketplace is withholding their money, with some saying they could go out of business.
Vinyl and CD seller Mario told the BBC Amazon is holding £5,000 leaving him "shaken and panicked" and fearing he can no longer continue trading.
Some sellers have written to their MPs to ask for help.
Amazon said its policy was designed to make sure there were sufficient funds to cover returns or customer claims.
Under the policy Amazon said it was holding money for seven days after the delivery date following a sale.
It introduced the policy for new sellers in 2016, but extended it to EU and UK sellers registered before that point in August of this year.
Amazon said it recognised the policy change could lead to "a one-time cash flow disruption" but that it had notified affected sellers three months in advance. However some sellers told the BBC this email was not clear – or in many cases went to their junk mail folder.
Mario has been selling music on Amazon for seven years, but said he can no longer afford to renew his stock, or pay for postage to fulfil his current orders.
Mario, whose money was frozen on 3 August, said he is unable to withdraw any for maintaining daily operations.
"I'm losing my company," he said. "I've never had a problem with my payments before. How can I feed my family, pay my bills?"
He told the BBC when he emailed Amazon Sellers' customer services, he received a "generic, stock" message.
He showed the BBC posts on the Amazon Sellers forum, where there are hundreds of complaints from people who have had their money withheld since 3 August.
Daniel Moore, 48, has a business called Ink Jungle that sells ink cartridges. He has £170,000 in reserve – and it is increasing by £40,000 a day, he said.
"The value they will be holding from us is disproportionately high versus the potential refunds processed by customer returns or non-delivery," he said.
His company turns over about £16m on Amazon and employs more than 20 staff.
Daniel said the withheld funds meant he will be unable to pay his £191,000 VAT bill, which is due this week.
He has contacted his local MP and the Financial Conduct Authority.
Michelle, 32, from Cheltenham has been selling pet products for more than 10 years on Amazon. She told the BBC the company is holding £16,000 of her takings.
She took out an £18,000 loan from Amazon Lending to help keep her business running, which she was expecting to receive straight away. But said she was told by Amazon she could not access the loan for two weeks, making things "very challenging indeed" for cash flow.
"We employ 13 members of staff and this is crippling our business", she said.
The BBC has seen several letters sent from sellers to MPs complaining about Amazon's reserve system.
The office of Conservative MP for Bracknell James Sunderland confirmed the matter had been raised with ministers, and that the Treasury was aware of it.
Amazon said the policy was first introduced for new sellers worldwide in 2016, but on 3 August this year it was also extended to sellers in the EU and the UK registered before 2016.
The small business commissioner Liz Barclay said many sellers had told her office they were being offered loans by Amazon at interest rates of around 14% to help them manage cash flow while they waited for funds to come through.
"They say they are being lent their own money at high interest, but for some the alternative is insolvency. We need big firms to understand that delaying small payments to small firms can have a massive negative impact and everyone loses," she said.
She added that with bank processing times, many sellers are facing a 14 days window with no income.
The challenges are similar to those faced by Etsy sellers after that marketplace began withholding 75% of sellers funds for around 45 days. Hundreds of sellers complained it was undermining their businesses. Following a BBC report into the problem, Etsy last week reduced the amount it was withholding.
An Amazon spokesperson said the process would "standardise this policy for European sellers to ensure they have sufficient funds to cover any financial obligations, like product returns or customer claims".
If you are an Amazon seller who has had funds withheld, tell us by emailing: haveyoursay@bbc.co.uk.
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Amazon sellers fear going under as site withholds cash
