Kabbage is a lending program based in Atlanta, Georgia that developed an online algorithm to simplify the application and approval process for small businesses. Unlike traditional lenders, they look at business performance online through business checking accounts, payment processing, and shipping data – not manual forms – to automatically assess qualification. Kabbage boasts a high success rate: Over 90 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 or $4,200/month for the past 3 months) 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. Kabbage lines of credit are used to cover operating expenses while waiting on payments and receivables, cover operating expenses during slower seasons, and covering unexpected expenses. Those who choose Kabbage business loans should remember that funding is not available to startups.
Loans from Kabbage are great for businesses that need capital on an ongoing basis. Loan amounts go up to $250,000. Kabbage also has a unique borrowing model that allows the borrowers to only use what they need. Even if a business is approved for up to $250,000, the borrower only pays for what they take.
Loans from Kabbage are set up on a short-term manageable payment platform. They offer eligible customers 6-, 12-, or 18-month loan terms.
Additional advantages of Kabbage Small Business Loans:
In comparison to other lenders, Kabbage provides a great deal of information online without having to apply first. Their website includes the following helpful information:
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.
Kabbage has a new exclusive Kabbage card that customers can keep in their wallets and access their funds whenever and wherever they need them. Customers can apply for the Kabbage card on Kabbage's website through a brief form, and the card will be delivered to them in 7-10 business days. When they receive it, customers can activate the credit card online through their Kabbage account dashboard. The benefits of the Kabbage card include:
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. Customers simply need their financial documents and a quality credit score. If a customer qualifies, there is an instant approval, rather than an extended waiting period.
As mentioned earlier, Kabbage's loaning paradigm is based on the line-of-credit industry. When customers 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 (Small Business Administration) service. Therefore, the borrower is not included in some key SBA programs. Other limitations include:
Kabbage only lends business owners a maximum of $250,000. This amount makes sense if there are only 12 months to pay back the loan, but it's not a large enough working capital for many businesses.
When someone takes out a Kabbage loan, 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 customers are really promising to Kabbage when they take out a loan.
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Mis-leading information on borrowing costs. Was told something and was charged differently. No one returns calls or emails to resolve this.
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!
Quicker than advertised no problems
Krystal was very helpful. Talked me thru some of the security stuff I was wary off Would not have gotton my business without her.
Quick and easy way to get a business line of credit for needed cash infusion and to build your business credit profile.
Bar none the easiest Financial Instution that I have ever dealt with.
Even though the line of credit loan was processed on line with no human interaction, Kabbage made this process very simple. It was simple and a pleasure. Thank You.
The process was easy and the rep;s were very helpful.
So far we have no complaints!
My contact person was THEE best ever. Went out of his way (even after hours) to help. Jeremy Williams Investment Associate Kabbage Inc. 678-713-7432 [email protected]
I could not believe that a loan can be availed so seamlessly. It is incredibly simple and instantaneous. Love to do business with these guys.
Overall my experience with Kabbage has been great. David my Account Manager has been available and very helpful along the way.
I took out a loan with Kabbage this year, and although it was expensive (as all of these atypical loans are), I paid it back on schedule, and the process worked great. I will borrow from Kabbage again. I've seen negative reveiws regarding collections if paid back late, or that the available funds will not be there when you need them. So far I have not seen that, but I will be ready with another lender as well during our slow business season so that I have funds available.
A great service at a fair rate BUT you cannot depend on them in a business situation. They pull frequent unannounced surprises. "Our computer model just happened to re-evaluate your funding limit while you were paying and you won't be able to re-borrow." Sometimes you may check your account to find an available balance. If you do the prudent thing and wait until you need it, it may vanish within a day or two. Most questions are met with "even I can't speak with the special team that handles that." or "The computer makes that decision. Nobody can interact with the computer model." In other words, straight answers are not available.