Kabbage Small Business Loans
Kabbage is a small business lender that strives to deliver affordable and practical lending products to small businesses. They have partnerships with well-known brands such as UPS, Etsy and Sage, who work with Kabbage's customers to enhance business operations.
To date, over 100,000 small business owners have done business with Kabbage, resulting in more than $1 billion dollars in funding. What's more, with an A+ rating from the Better Business Bureau, Kabbage is a reputable lender that provides excellent support to small businesses.
If you are a small business owner that needs business capital, Kabbage is an excellent option to consider due to the unique criteria they use for determining loan eligibility. Here is a look at that and more specifics on the loans they offer.
Kabbage Loan Specifics
With Kabbage, you can receive a small business loan from $2,000 to $100,000. Due to this wide range you can have access to the capital you need no matter what the purpose is for the loan.
Kabbage is unique in that if you receive approval you have access to an open credit line you can withdraw from once a day. This provides you with flexibility in that you can request money from your credit line as you need it.
Kabbage also has six-month repayment terms. A beneficial component of this is you can pay off the debt quickly to get it off your books. Considering that you only repay the debt you borrow, Kabbage is a great way to withdraw what you need without overburdening your company's finances.
Kabbage Loan Fees
Kabbage keeps its loan fees low. How it works is once you withdraw from your credit line you have six months to repay it. For the first two months of repayment, Kabbage assesses you a loan fee from one to 12 percent of the amount borrowed based on the score they provide you, which depends on factors such as your organization's operational data. After those first two months, you will pay one percent of the loan's balance. This means that each month you pay 1/6th of the loan's balance plus the fees assessed. You may pay off the loan at any time without fear of incurring a penalty.
Application Process with Kabbage
What makes Kabbage so different is they can analyze how you do business by examining your company's data. If you use services such as eBay, PayPal or Amazon, you can link the accounts to your application to show Kabbage your cash flow and operational data.
Once you link the accounts and provide the application information, Kabbage can approve you on the spot. This means you can apply for and have access to business capital within minutes. To access the cash, you can have it deposited into your business checking account or PayPal. If you opt for PayPal, it can take three to four business days to transfer the money from PayPal to your bank account.
Kabbage looks at many different factors to determine eligibility for loans. Here are some of the factors you should be mindful of at the time of applying:
- Kabbage looks at your monthly revenue, your seller's rating (if applicable), length of business operation and how many transactions you do in a specified period. From this data they can surmise how much you would be able to borrow and repay within the six-month term.
- To apply, you must have a valid business checking account or other payment services such as PayPal or Amazon, so they can have access to your data.
- Kabbage will also check your credit history to verify identity. This means even if you have a lower score it might not disqualify you if your company's operational data is healthy.
Benefits of Using Kabbage
Kabbage makes it simple to apply and receive funding within minutes. Unlike using traditional lenders, which can be a time consuming process, you can link your business checking account or PayPal account to your application, so Kabbage has access to the data they need to determine eligibility quickly.
Because it is an open-ended line of credit, you can borrow anytime you need it. This makes it a better option for some than closed-end loans where you borrow credit, pay it off and then if you need more funds, go through the application process again.
Moreover, with a six-month repayment term, it helps you get the debt off the books quicker.
Drawbacks to Using Kabbage
Kabbage's open-ended loan and short repayment option might not be the best for all businesses. For example, if you plan to do a large expansion and need to borrow a lot of capital up front, the short repayment term of six months could hinder your company's finances due to the high monthly payments and fees.
Speaking of fees, if you fall on the lower end of the spectrum, you could end up having to pay substantially to use Kabbage. As an example, say you have to borrow $10,000 and for the first two months you have to pay four percent of your loan's balance. For those two months, you'll have $400 added to your monthly payment of $1,666.67. Therefore, it's important to plan in advance for these higher monthly payments.
Customer Service with Kabbage
Kabbage earned an A+ rating with the Better Business Bureau as a result of its dedication to outstanding customer service. You can contact staff either through the phone or email to have any questions or concerns you have addressed.
Tools with Kabbage
An important component to applying for business capital is to ensure you can afford it. Kabbage has a loan calculator on its website you can use to determine how much the loan will cost including fees. All you do is slide the bar to the amount you want to borrow. From there you click on the Payment Schedule tab, which shows you how much your fees are per month and also provides you with how much your monthly payment will be for the six months.
Verdict - Fair
Kabbage is a great choice for someone looking for a unique alternative to typical business loans, especially if you own a profitable business and you're looking to expand. However, if you aren't prepared to pay for your loan within six months then you may need to consider another service.