By: Theresa Houghton
Kabbage is best for small businesses owners that have less than perfect credit, have been in operation for more than one year, and are looking for quick access to capital up to $250,000.
Kabbage provides nearly immediate credit lines to businesses for use in covering any type of expense. Once approved, you’ll be notified of how much credit and which of their two loan terms you qualify for. Approval gives you instant access to funds, and you can draw on the approved amount any time you need extra cash for your business. A line of credit from Kabbage supports you through slow seasons, provides funding for small purchases, and helps cover essentials such as payroll when cash flow is interrupted for any reason.
In addition to features listed above, businesses qualifying for a Kabbage loan also get access to perks, including service discounts and free financial help. You may choose to sign up for UPS My Choice, a free 60-day trial of Constant Contact, or free trials of e-commerce software. Free consultations for taxes and credit and free Vonage business phone services are also available.
Applying for a loan from a bank or credit union can mean spending a great deal of time gathering financial information, updating your business plan, and crunching numbers to prove you’re trustworthy enough for them to lend you money. Kabbage has only a few simple requirements for business owners looking to apply for a loan:
During the application process, Kabbage asks for basic information you don’t have to dig around in your files to find:
You’ll also be asked to create login credentials and connect your bank account. Kabbage provides the opportunity to connect additional business accounts, such as QuickBooks, eBay, Amazon, PayPal, and Stripe. Linking multiple services increases the amount of revenue shown and gives Kabbage a better picture of your current financial status.
Unlike most traditional lenders, Kabbage considers multiple factors to determine whether or not to extend a line of credit to your business. In addition to your credit score, they look at:
Checking account information is required to verify your business, and a hard credit check is performed to obtain your credit score.
The entire application process should take 10 minutes or less. After receiving your application, an automated system reviews the information and calculates the amount of money and term length to which you’re entitled. It doesn’t take long to find out if you’re approved, and funds can quickly be deposited to the account of your choice. PayPal deposits may be almost instantaneous. Bank deposits can take up to three days depending on the bank you use.
If your current financial situation doesn’t allow your business to qualify for a Kabbage loan, the company keeps your information on file and reviews it from time to time. Instead of having to reapply in the future, you’ll receive notice from Kabbage when funding does become available. The same process is used to offer an increase in your credit line as your business grows.
To qualify for a Kabbage loan and maintain an active profile, all information submitted must be accurate to the best of your knowledge. Kabbage requires users to maintain the accuracy of such information and reserves the right to close accounts not meeting these criteria.
Terms from Kabbage business loans are simple and easy to understand, so you don’t have to worry about complicated fee structures or changes in interest rates. The six-month and 12 month terms require you to pay a percentage on your current withdrawal amount for the first two or six months, respectively. Kabbage interest rates then drops to 1 percent for the remaining months.
Each month, you pay off one-sixth or one-twelfth of the loan plus the monthly fee. If you take out multiple loans, payments are consolidated into a single fee to prevent confusion or missed deadlines.
Payments are automatically withdrawn from your connected bank account, but you also have the option to make manual payments whenever you wish. Kabbage doesn’t charge fees for early repayment, so you can choose to pay more than the minimum at any time. Paying off the loan before the terms are up can actually mean owing less overall because you spend fewer months paying associated fees.
Although you can withdraw money from your credit line up to once per day, you’re never obligated to use any of the funding Kabbage approves for your business. If you have no outstanding balance, no monthly payment is required.
Kabbage provides an extensive section of educational articles, guides, infographics, blog posts, videos, and webinars covering the most important aspects of running a business. Visit the resource section and choose from categories such as growth, funding, management, and innovation to access relevant resources.
FAQs provide answers to common questions about the loan process and service features. If you have any questions about how funding works, what the payment and fee schedules are like, or how the application process works, you’ll find the answers here. A loan calculator is available under the “Business Loans” drop-down menu to help you figure out the total cost of different loan amounts.
You can also contact Kabbage via phone or email with additional questions and concerns. Email may be sent through the website or directly to support, and messages are typically answered within 24 hours. This fast response time prevents delays from interrupting important business operations.
Kabbage is a useful lending option for the modern small business. Their automated review and approval process takes the confusion out of applying for a loan and gives you more time to focus on running your company. Requirements are straightforward, and they look at more than just a credit score when determining whether or not your business qualifies. By offering multiple loan amounts, Kabbage is able to service a variety of businesses nationwide. The terms and fee structure are easy to understand, and no hidden fees are charged. All loans are structured in the form of credit lines so that you can withdraw money on an as-needed basis and don’t have to worry about making payments unless you have an outstanding balance.
Multiple withdrawal methods and an automatic payment system make Kabbage preferable for on-the-go business owners. You get access to cash wherever and whenever you need it, meaning your business can keep going even if you’re not there to immediately solve a cash flow problem. With their A+ Better Business Bureau rating and detailed security policy, They have earned their reputation as a reliable small business lender.
Kabbage is designed specifically for small businesses. Founded in 2009 by three financial entrepreneurs, the alternative lender seeks to provide a faster, easier way for companies to obtain necessary funds. An automated application system utilizes the Kabbage technology framework to “quickly [connect] small businesses with capital.” Services are provided to companies in all 50 U.S. states as well as territories. They also offer a platform for businesses to integrate into their own systems to reach customers worldwide.
Forbes magazine recognized Kabbage as one of the most promising companies in America in 2014 and 2015, and the platform was featured in the 2015 Inc. 500 list of the fastest-growing private companies in the nation. Featuring a simple, straightforward application process and providing access to as much as $250,000 in funds through lines of credit, Kabbage offers an option for businesses looking for a way to avoid the long and complex procedure required when applying for a traditional loan.
925B Peachtree Street NE
Atlanta, GA 30309