Amazon has told thousands of marketplace sellers in the UK and continental Europe it will hold on to sale proceeds for more than a week in a move that small businesses say could force them to go bust.

The company has written to sellers to inform them it will no longer credit their accounts as soon as a sale is made online but will do so a week after an item has been delivered.

“You may experience a one-time cashflow disruption,” Amazon wrote in a letter seen by the Guardian.

Sellers typically had to wait up to three days for the funds to be released into their accounts. Now, many will wait 10 days after delivery before being able to access the cash.

Businesses told the Guardian the move could “cripple” their operations, and the cashflow crunch could force them to go bust.

Some said they had thousands of pounds held back. One said they had just over £100,000 “locked in Amazon”.

Rival online marketplace Etsy was forced to row back on a policy, introduced in late May, of holding back as much as 75% of some sellers’ takings for at least 45 days.

UK vendors boycotted the online craft marketplace over the hold-up in payments, forcing Etsy to say it would reduce the amount held back. The most common level of reserve was now expected to be 30%.

Dozens of Etsy sellers said they had been released from the reserve system altogether after a media outcry, although others said they were still being affected or had found their online shops suspended.

Amazon has said it has 225,000 small- and medium-sized businesses selling through its marketplace across Europe, including the UK. About 15% of its sellers, or about 33,750 – most of whom signed up before 2016 – could be affected by the change.

The UK’s small business commissioner, Liz Barclay, said she had been contacted by a number of Amazon sellers and feared the problem was widespread among domestic sellers.

One seller told Barclay: “I am currently owed £10,000. I expect that closer to £25,000 will be owed before we see any cashflow again. We are a business that sells only on Amazon, we have no other income.”

Another seller told the Guardian he would be owed about £35,000 after seven days and would not be able to pay staff or loan repayments on time because of the delay in receiving funds, putting the future of his business at risk. “[This move] will cripple our operation,” he said.

A separate retailer, who sells aquatic supplies, said he was already owed £6,000 and expected that to rise to £10,000 by the time funds were cleared, nearly two weeks later than expected. He said: “We’re fortunate to have a shop as well, which is subsidising the online business. If we didn’t have this other income we wouldn’t be able to pay suppliers and staff.”

Libby Pearson, who trades as Soul Nutrients, said Amazon sellers had begun writing to their MPs to protest about the policy that was “forcing thousands of small business owners into devastating situations financially at an already crippling time for small business, unable to pay wages, our bills, suppliers and even HMRC”.

The entrepreneur, who has sold nutritional supplements on Amazon’s marketplace since 2009, said she had been given just a month’s notice of the change of policy and knew others who had received almost no notice. Amazon said it had notified sellers in May.

Pearson said: “I am currently considering if my business will survive this latest Amazon policy and feel there should have been given at least three months’ notice for such a crippling policy to have been changed.”

Barclay said sellers used funds to buy materials in order to sell more stock and the new policy had interrupted cashflow.

“There will be plenty of people who will say that’s no big deal … just wait the additional nine days and the cash will be flowing again but that’s to fail to understand how small businesses work,” she said.

Dan Romanoff, an equity analyst at investment management group Morningstar, said the change in policy was probably intended to simplify Amazon’s administrative burden, protect it from fraud and allow for returns.

Amazon should accrue interest on the funds, amid rising rates, but Romanoff said there would not be a “meaningful change” to Amazon’s income from interest as a result of the change.

An Amazon spokesperson said: “This policy was introduced in August 2016, and there will be no impact for over 85% of sellers in Europe.

“This process will standardise reserve policies for European sellers to ensure they have sufficient funds to cover any financial obligations, like product returns or customer claims.

“We recognise it may lead to a one-time cashflow disruption which is why we notified affected selling partners three months in advance to them to help prepare for this change.”

Amazon last week said quarterly sales increased 11% to $134.4bn (£105.2bn), leading to profits of $6.7bn, nearly double what analysts expected.