Kabbage

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Kabbage is an online lending company based in Atlanta, Georgia and has developed an online algorithm that simplified the financing process for small businesses. They are unique in the business loan industry because they use data from business checking accounts, payment processing, shipping data, and other e-commerce sites to reach small businesses that are looking for loans. Kabbage boasts a high success rate: Over 80 percent of all Kabbage transactions come from repeat users.

For borrowers looking for a small business loan from Kabbage, having a low credit score won't necessarily knock them out of the running. Kabbage looks primarily at current revenue (they want to see more than $50k/year) and the amount of time in business (needs to exceed one year). Typical Kabbage borrowers also have a good social media presence and high amounts of inventory. Small business loans from Kabbage are typically used for inventory purchases, system upgrades, and marketing.

The Good

  • Short-Term Loans
  • Transparent Application Requirements
  • Resources
  • Repeat Users

Short-Term Loans

Loans from Kabbage are almost like a cash advance with lower interest - they are perfect for businesses that need a little bit of cash and can pay it back in a short amount of time. Loan amounts range from $2,000 to $150,000. Kabbage also has a unique borrowing model that allows the borrowers to only use what they need. Even if a loan is approved for $150,000, the borrowers only pay for what they take.

Business advances from Kabbage are set up on a short-term, manageable payment platform. The term of the loan is either 6 or 12 months, depending on your preference.

Additional advantages of Kabbage Small Business Loans:

  • Loans are scalable and manageable
  • Instant approval and fast access to funds
  • Low rates and short terms

Transparent Application Requirements

Kabbage provides a great deal of information online without having to apply first. Their website includes the following helpful information:

  • Companies need to be in business for one year before applying
  • Companies need to be making a minimum of $50k annually
  • No pre-payment penalties
  • No closing fees
  • No origination fees
  • 1.5-10 percent interest rates
  • Good resources
  • No minimum credit score needed

Resources

Kabbage has a "Resources" tab on their website which connects to a blog. This site houses a good amount of content that businesses can access for free, including business news, webinars, eBooks, tips, and more. Under Kabbage's "How It Works" tab, there is a calculator that gives potential borrowers an estimation of their total payment based on the amount they plan to borrow and the length of the term. Typically, the longer the term of the loan, the higher the amount owed.

Repeat Users

The average Kabbage customer utilizes the line of credit four times a year. This indicates that many businesses are using Kabbage's service and that the payment scale is affordable and sustainable. Additionally, the high number of repeat users indicates that Kabbage's application and approval process is streamlined for small businesses. You simply need your financial documents and a quality credit score. If you qualify, there is an instant approval, rather than an extended waiting period.

Check rates with Kabbage

The Bad

  • Short-Term Solutions
  • Low Amounts of Capital
  • Personal Guarantee

Short-Term Solutions

As mentioned earlier, Kabbage's loaning paradigm is based on the line-of-credit industry. When you apply for a loan with Kabbage, it is a short-term solution. Most Kabbage clients use their funds for short-term needs, such as equipment upgrades, purchasing inventory, or funding payroll. Kabbage does not offer traditional loans, large loans for bigger businesses, or other types of conventional funding. Another factor to consider is that Kabbage does not offer a SBA (Small Business Administration) service. Therefore, the borrower is not included in some key SBA programs. Other limitations include:

Low Amounts of Capital

Kabbage only lends a maximum of $150,000. This amount makes sense if there are only 12 months to pay back the loan, but it's not a large enough sum for many businesses.

Personal Guarantee

When you take out a loan with Kabbage, they state that "you personally guarantee that you will pay back your loan, but you do not have to put up any real estate or personal collateral." In many cases, a personal guarantee requires the borrower to put up personal collateral. This confusing language makes it difficult to know what collateral you are really promising to Kabbage when you take out a loan.

The Bottom Line

Kabbage is a great way to secure short-term financing for a business. Borrowers should consider Kabbage as a lender if they need small amounts for immediate short-term needs, such as new inventory purchases or payroll. If you don't mind waiting a few days for funding and you feel confident in your ability to pay back the loan (and don't mind having a personal guarantee attached to the loan), we recommend using Kabbage.

34 Kabbage Reviews

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  • User Score

    6

    September 13th, 2017

    So here is why I will give this company a six star out of 10 rating. If you have changes to your account it takes at least 24 hours for their support team to acknowledge your email and then at least another 7 to 10 business days to make such a small change. For a company that is looking to grow business the support needs to change this is not a customer-focused organization. As far as their website and everything else I would give it a 10 star. The website is easy to navigate it's easy to connect your various sources and the software is pretty cool. I have yet to be approved for a loan even though I have everything and my mother attached to it. I strongly urge people to not only use this organization but to do a little shopping before you select a company for small business loans.

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  • User Score

    10

    December 5th, 2016 Alpena, MI

    very easy to use and work with. would use them again.

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    1 0
  • User Score

    10

    December 4th, 2016 Tuscaloosa, AL

    Agent called me proactively and explained setails and how it works. Credit line has been increased in first month.

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    1 0
  • User Score

    10

    December 2nd, 2016 Ridgeland, MS

    The process was very simple and the funds deposited into my account earlier than quoted. Payment schedule and interest rate is MUCH lower than my previous loan company. Highly recommend this company and will use Kabbage again!!

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  • User Score

    10

    December 2nd, 2016

    Quick and Easy! The site is also user friendly.

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    0 0
  • User Score

    8

    December 2nd, 2016 West Chester, OH

    It is an easy process. and the funds are available almost immediately. I am looking forward to a lower rate as I continue to establish my business with Kabbage.

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  • User Score

    9

    December 2nd, 2016 Montgomery, TX

    As another poster mentioned, Kabbage is awesome for quick cash flow resolutions. That was my purpose for applying to them as well. The service was excellent and the speedy processing and ease of qualifying was superb. My only issue, and it's a very small one, is the 6 month repayment requirement. I didn't see a 12 month option when I submitted my request but I do see that this is something that they offer. Then again, the purpose of this line of credit isn't to fund my larger expenses so, as I mentioned, that was a very small issue. I think Kabbage is an awesome company and a great resource to have for any small business. I look forward to a long relationship with these guys. PS: Definitely the fastest, easiest way that I've seen to get instant capital for your business as long as you meet their prerequisites.

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  • User Score

    10

    December 2nd, 2016 Virginia Beach, VA

    Excellent business loan provider when needed! Simple and easy and it took less than 48 hours to have funds deposited. I highly recommend Kabbage for every business when a quick loan is needed. We will use Kabbage again in the future, if necessary.

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  • User Score

    10

    December 2nd, 2016 Dallas, GA

    Easy, fast approval. Good terms, easy online tools.

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  • User Score

    8

    December 1st, 2016

    The process was easy. Customer service was great when it came to requesting and reviewing the additional info needed for approval

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  • User Score

    10

    December 1st, 2016 West Palm Beach, FL

    There service and support team is the best. They have walked me through everything and I thank them. Because of them I am able to expand my business and am looking to apply for an additional 30k loan TJT- President ,Castleberry Holdings, Inc.

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  • User Score

    10

    December 1st, 2016

    Simple process, fast response, perfect solution for small business in need of cash flow assistance from time to time. Great communication. Highly recommend.

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  • User Score

    10

    December 1st, 2016 Reno, NV

    Very easy process and straight forward re-payment policy. I've been very happy with the service.

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  • User Score

    10

    August 8th, 2016 Orange, CA

    Very simple process. Easy to manage.

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  • User Score

    6

    August 8th, 2016 Phoenix, AZ

    I am concerned that this product, with its continued pricing structure becomes a continuous circle of borrowing. Maybe as I continue as a customer, the pricing becomes more favorable. We will see. As far as ease of use, this is a good product. I will continue for now.

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  • User Score

    9

    August 2nd, 2016 Manheim, PA

    Prompt service and they DO what they say they will do.That's Refreshing.Perfect solution for any business that has Bunched cash flow issues, like mine. Highly recommend them..45 yrs in Business and will never use a Bank agian for cash flow issues.

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  • User Score

    8

    August 2nd, 2016 Milford, CT

    Kabbage was not able to provide me with what i required at first. then 1 month later they helped me out a bit. i play on developing a great relationship with Kabbage and using their service a lot for my business. RF

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  • User Score

    10

    May 19th, 2016 Saint Michael, MN

    Very helpful in step by step process applying for loan. Great communication in emails and phone

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  • User Score

    10

    May 11th, 2016 Santa Cruz, CA

    It was fast. Thank you again for doing it faster and better then the banks

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  • User Score

    4

    May 5th, 2016 New York, NY

    Mis-leading information on borrowing costs. Was told something and was charged differently. No one returns calls or emails to resolve this.

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    1 0