Kabbage Small Business Loans Review

About Kabbage

Kabbage

Kabbage® offers a simple, modern way for businesses to access funding with the flexibility they need. Through the safe and secure online application, businesses can link their latest information to be qualified quickly for lines of credit of up to $250,000. (1, 2) Kabbage small business loans have simple, 6, 12 or 18-month payment terms, and you can withdraw funds whenever (3) you need extra capital. Payment schedules can easily reviewed before taking a loan to avoid any surprises. DISCLAIMERS 1. Kabbage can approve you in minutes for up to $200,000 when they are able to automatically obtain your business data and verify your bank account. Lines of credit over $200,000 require a manual review. In some situations, errors may occur during the sign-up process, or Kabbage may need to send micro-deposits to confirm your bank account for security purposes. If this is the case, it may take up to several days to provide you with access to funding. 2. Credit lines and pricing are subject to periodic review or change, including line and pricing reductions, line and pricing increases, or line eliminations. Individual requests for capital are separate installment loans. All loans are subject to credit approval. Frequently Asked Questions. All Kabbage business loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC. 3. After you apply, Kabbage will inform you if the loan you are requesting qualifies for a 6-month term, or a 6-month term and a 12 or 18-month term. Eligibility for 12 and 18-month loan terms is subject to availability and can change based on underwriting criteria.

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What is Kabbage?

Kabbage Inc. was founded in 2008 and publicly launched and began making its first loans in May 2011. The company provides automated, online funding to small business owners in just minutes — all from a computer or phone.

The Atlanta-based online lender helped fill the void when banks scaled back from offering loans to small businesses following the Great Recession, which began in the 2007. Kabbage has extended more than $4 billion directly to small businesses since its inception and now offers lines of credit up to $250,000 — a big plus for larger and more specialized businesses.


What you can expect with Kabbage?

Money is what Kabbage specializes in, and cabbage — another word for money — is literally how the company got its name. When you get a business loan from Kabbage, here’s what you can expect:

No upfront costs. When offered a line of credit, borrowers won’t pay any upfront costs and, when using only part of the total line of credit, borrowers will be charged only for the portion they use.

One-of-a-kind lending platform. Kabbage has the only lending platform that allows small business owners to apply qualify and access funding through a mobile app.

Fast application process. Filling out an application with Kabbage takes fewer than 10 minutes and involves minimal paperwork.

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Small business solutions from Kabbage

Kabbage offers revolving lines of credit of up to $250,000 to qualifying business owners. Once you draw on that line of credit, you’re subject to either a six- or 12-month term loan, depending on the total loan amount. Loans under $10,000 are automatically given a six-month term.

Kabbage loans carry a monthly fee for every month you carry a balance, which ranges from 1.5% – 10%  of the principal loan amount. No fees will be assessed until you actually borrow from that line of credit, and you’re only charged for the funds you take. The fee percentage and the qualifying loan amount are based on your personal credit and other data points. Once you pay the term loan in full, the credit line goes back to the initial loan amount provided. Funds are usually available within 24 to 72 hours — or within minutes if you use your PayPal business account.

Borrowers can also access funds with the Kabbage Card. The Kabbage Card is linked to your Kabbage account and allows you to access your business line of credit whenever you need to make business-related purchases online or in-store. You can’t use the card at the ATM, but if you need cash for your business, you can log onto your Kabbage account and make a bank transfer that will draw from your line of credit. Each draw will have its own six-month loan term and fees that will be combined into one large payment.

Compare Kabbage Small Business Solutions
Loan product Loan amount Loan term APR range/ factor rate Fees Time to funding
Revolving Line of Credit Up to $250,000 Six to 12-month term Not provided by the lender 1.5% to 10% (monthly fee of the principal loan amount) Funds hit account in 1 to 3 business days or within minutes to a PayPal business account.
Short-term Loan Up to $250,000 (can take out as little as  $100) 6-month term Not provided by the lender 1.5% – 10% (monthly fee of the principal loan amount) Funds hit account in 1 to 3 business days or within minutes to a PayPal business account.
Long-term Loan $10,000 to $250,000 12-month term Not provided by the lender 1.5% – 10% (monthly fee of the principal loan amount) Funds hit account in 1 to 3 business days or within minutes to a PayPal business account.

Rates current as of 6/27/2018


Eligibility requirements

Applicants should be in business for at least one year and have monthly revenue of at least $4,200 over the last three consecutive months, or have annual sales of at least $50,000. If you meet these prequalifiers, you will be able to continue with the application process.

Although your credit score isn’t the only determining factor, it should be 550 or better. A negative credit history can impact your loan decision or how much you receive. Kabbage also assesses business revenue, transactions and other bank account data.

Applicants should also have a business bank account that’s set up for online banking and no more than three overdraft fees in the last 90 days. Kabbage runs a hard credit check to look for things like delinquencies and bankruptcies. The system does an automated review of all provided information and offers a quick response within minutes.


Businesses not eligible for a business loans with Kabbage

According to Kabbage customer service, the company doesn’t work with nonprofits.


How to apply for a line of credit with Kabbage

The application process takes roughly 10 minutes to complete online here. Once you’re approved, the funds will reach your business checking account in one to three days. If you have a PayPal account, you can get the funds deposited immediately for instant access to funding.

Kabbage is a fully automated process that doesn’t require applicants to submit documentation unless something needs to be verified during the application process, but does require that they have a few things available when applying.

  • Create a username and password
  • Link your business checking account (login credentials)
  • Link business services such as Amazon, eBay or PayPal to your application as additional proof of income (login credentials)
  • Business information (name, address and details about the business)
  • Personal information (Social Security number or tax ID number)

Pros/cons

Pros Cons
 Easy application process   Confusing fee structure
  Fair and poor credit applicants welcomed   Higher than average fees based on principal loan amount
  Fast funding   Offers only long-term lines of credit

Should you apply with Kabbage?

Small business owners with with financially stable businesses but poor to fair credit would be good applicants for a business loan with Kabbage. The fee structure is a bit confusing compared to other lenders.

The company doesn’t require a minimum credit score for a line of credit, but keep in mind that your business owner credit score is an indicator of your financial decisions. Kabbage considers a business’ financial stability and performance over its owner’s credit score for lending products.

It’s also important to note that the credit line and pricing could change based on your business performance. The total line of credit available to you and pricing could be reduced, increased or eliminated based on periodic reviews.


The bottom line: How Kabbage stacks up

Kabbage touts a simple, hassle-free process for small businesses through its fully automated, online platform that enables borrowers to apply, qualify and access capital through a mobile app. This is great for business owners who need cash immediately and don’t mind paying higher fees.

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