Kabbage

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Kabbage is an online lending company based in Atlanta, GA. Kabbage developed an online algorithm that simplified the financing process for small businesses. When applying for a small business loan, Kabbage has in-depth knowledge of business processes, helping the borrower get faster access to their money.

Kabbage is unique in the 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. Also, Kabbage has a high success rate: Over 80 percent of all Kabbage transactions come from repeat users.

If you want a small business loan from Kabbage, having a low credit score won't necessarily knock you out of the running. Kabbage mostly looks at your current revenue (they want to see you're making more than $50k/year) and the amount of time you've been in business (needs to exceed one year). Typical Kabbage borrowers also have a good social media presence and high amounts of inventory.

Best Uses

Small business loans from Kabbage are typically used for inventory purchases, system upgrades, and marketing.

Minimum Qualifications

  • In business for over one year
  • Making at least $50k per year
  • No minimum credit score needed

The Good

  • Transparent requirements
  • Instant approval
  • Low APR

Advantages

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. You can borrow between $2,000 and up to $150,000. Plus, Kabbage has a unique borrowing model that allows the borrower to only use what she/he needs. Even if someone is approved for a $150k loan, you only pay for what you take.

Business advances from Kabbage are set up on a short-term, manageable payment platform. The term of the loan ranges from six & twelve months. Benefits of the Kabbage platform include:

Pros of Kabbage Small Business Loans

  • Loans are scalable and manageable
  • Use and pay for only what you need
  • Short, manageable payment plan
  • Instant approval and fast access to funds
  • Low Rates & Short Terms

Transparent Application Requirements

Those interested in using Kabbage can find a ton of information online without having to apply first (a commodity in the lending industry). Here is some of the information we easily found online:

  • 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

Resources

Kabbage has a resources tab on their website that connects you to their blog. This site houses tons of content that businesses can access for free. Find 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. The longer you have the loan for, the higher the amount you will typically pay.

Repeat Users

The average Kabbage customer utilizes their line of credit four times a year. This indicates that a lot of businesses are using Kabbage's service and that the payment scale is affordable and sustainable. Also, a high number of repeat users indicates that Kabbage's application and approval process is streamlined for small businesses. Kabbage's application and approval platform are also very easy to use. 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 solution
  • Personal guarantee

Short Term Solutions

As we mentioned earlier in this review, 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 an SBA-based 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 $150k. This amount makes sense when you only have 12 months to pay back your loan. But again, 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 means that you have 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 your 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.

33 Kabbage Reviews

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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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  • 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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  • 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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  • 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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  • User Score

    10

    May 5th, 2016 Williston Park, NY

    This has been the best experience in obtaining a business loan. Fast, secure, an "all online" paperwork operation. No hassles, but plain and simple. Highest loan amount I've been offered so far!

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