Kabbage 2020 Review
For business owners with less-than-perfect credit scores, finding fast funding can be difficult. Alternative lender Kabbage aims to close that gap with their short-term lines of credit that take into account more factors than many other lenders.
Business owners can apply, receive a decision on their eligibility, and begin drawing funds within minutes, which is helpful to those businesses that need extra cash for an emergency.
Kabbage also offers multiple ways business owners can receive their funds, including requesting money via desktop or mobile app, as well as a special spending card that draws directly from the line of credit.
Kabbage Loans: What You Need to Know
Founded in 2009, Kabbage has become one of the most recognizable names in the alternative lending industry in the last decade.
Business owners can borrow up to $250,000 in short-term lines of credit for up to 18 months. Because Kabbage only offers lines of credit, access to needed cash comes quickly after approval, as little as a few minutes after approval.
Repayment is done monthly instead of weekly or daily like many business lines of credit, giving borrowers more breathing room when making repayments.
Kabbage works with borrowers who have lower credit scores, taking into consideration other information such as banking, accounting, and e-commerce data when deciding who to lend money to.
Their more lax borrowing requirements and quick access to cash does come at a price, though.
Kabbage’s lines of credit come with interest rates between 24% and 99%, making them among the most expensive lenders in the industry. There also are no real incentives for paying off your line of credit early, as Kabbage front-loads interest and fees.
H2> Why Small Business Owners Choose Kabbage
Kabbage offers business lines of credit up to $250,000 and doesn’t have a minimum required credit score. That makes them a great choice for business owners who have less-than-perfect credit.
They also offer monthly repayment of their lines of credit, where other lenders require weekly or even daily repayment. This gives business owners more security in their cash flow, as they don’t have to worry about making frequent repayments.
Flexibility
Kabbage’s withdrawal options - the traditional method via desktop or mobile app, as well as a no-fee spending card - gives borrowers flexibility when they need it most.
Their quick-and-easy application is also a big draw, with many business owners going from starting the application to having money in their pocket in an hour’s time. That’s an incredibly attractive option for those businesses that need extra money for a looming emergency expense. H3> Wide Variety of Repayment Plans
For business owners who don’t like having debt hanging over their heads for years, Kabbage’s six-, 12-, and 18-month repayment terms mean you can repay the debt in a short amount of time and move on with your life. H3> Kabbage Features:
Fast and easy application process No minimum credit score required More flexible eligibility requirements, including e-commerce and banking data Quick access to funds Flexible withdrawal options, including a free spending card that draws directly from your line of credit Monthly repayment instead of daily or weekly Lines of credit up to $250,000 Easy access to customer support
How Does Kabbage Work?
Kabbage offers lines of credit with six-, 12-, and 18-month repayment terms up to $250,000 to business owners. There are no minimum credit score requirements, and repayments are made on a monthly basis.
While Kabbage has lower qualifications for funding than other lenders, those more flexible requirements are traded off for higher interest rates. Average effective interest runs between 24% and 99%, meaning you’ll pay a lot more to borrow money from Kabbage than from other lenders.
Kabbage doesn’t work with all business owners. They do not lend to the following industries:
- Non-profits
- Marijuana
- Firearms
- Gambling
- Financial institutions
- Other lenders
Kabbage also will not lend to a business that has a large outstanding balance with other lenders.
Applying for Kabbage
Applying for a business line of credit through Kabbage is quick and easy, with some borrowers getting access to cash in as little as 10 minutes.
Simply visit Kabbage’s website to create a free account. You will be asked to provide basic information about yourself, your business, and your finances.
Kabbage reviews your information and lets you know how much capital you have access to.
Draw as much as you need from your line of credit right now, and come back for more when you need it.
Cash is available by requesting it online or through the mobile app, or pay for purchases directly with a no-fee spending card. This card draws from your line of credit, giving you easy access to funding.
Documents Needed to Apply for Kabbage
Because Kabbage doesn’t base your funding eligibility on data such as your credit score, you don’t need a lot of documentation to apply.
Most applicants only need some financial information that helps Kabbage determine eligibility, borrowing limit, and rates, including:
- A business checking account
- Three months of data from accounting software, if you use it
Kabbage establishes a secure read-only connection with the financial data you provide when evaluating your application.
Where Is Kabbage Available?
Kabbage is available in all 50 states and to most industries.
Additionally, the lender doesn’t lend to businesses without:
- A minimum of $2,500 average bank balance
- Business owners who declared personal bankruptcy less than one year ago
- Borrowers who have less than a 25 percent share in the business
- Businesses with more than three days of non-sufficient fund transactions
Alternatives to Kabbage Business Loans
Contact Kabbage:
Website: www.kabbage.com Customer service: (888) 986-8263 Hours: Monday-Friday, 8 a.m.-9 p.m. EST Saturday-Sunday, 10 a.m.-6 p.m. EST Address: 925B Peachtree Street NE Suite 1688 Atlanta, GA 30308
Kabbage Pros
- Accredited service: Kabbage holds several accreditations, including an A+ from the BBB (Better Business Bureau) and a 9.3 on Trustpilot.
- Monthly payments: Repayments are made monthly, as opposed to the daily or weekly payments required by other lenders.
- More than just your credit score: Kabbage doesn’t weigh your personal credit score as much as other business lenders in the market.
- Fast cash: Fast decisions and access to money.
- Cash whenever you need it: Kabbage’s credit line is always available once you have paid it off fully.
- No hidden fees: There are no extra or hidden fees. Kabbage provides transparency with their pricing.
- Financing up to $250,000 available
- __Quick, convenient application __
- Apply online or through the mobile app: You can even withdraw using an online or mobile app request, or get a fee-free spending card
- No need to designate how you’ll use the money before you get approved.
- Available to business owners with lower credit scores and past personal bankruptcies.
- Monthly repayments instead of daily or weekly.
- Six-, 12- and 18-month repayment plans.
- Helpful, friendly customer support.
- No collateral or credit checks required.
Kabbage Cons
- Higher interest fees than other lenders
- Only offer lines of credit
- Front-loaded interest means expensive early repayments
- Prepayment penalties if you pay the 18-month lines of credit early
- Not available for all industries
Kabbage Pricing
Kabbage’s interest rates are based on business financial information, the amount borrowed, and the term chosen.
Effective interest rates vary from 24% to 99% annually, making Kabbage one of the more expensive options for business owners. Average annual interest rates with Kabbage are around 40%.
Kabbage also front-loads its interest costs for business owners borrowing on six- and 12-month terms. For six-month repayment terms, interest costs are assessed in the first two months of borrowing. Interest costs are assessed in the first six months for its 12-month products.
For those borrowers choosing the six-month repayment, borrowers pay between 1.5% to 10% of the amount borrowed in the first two months. This interest fee is the same for the first six months of borrowing on the 12-month products. Once the interest front-loading is complete, borrowers pay a fee of 1.25% on the total amount borrowed.
Those choosing the 18-month repayment term, borrowers are charged monthly interest rates between 1.25% to 3.25%.
There are no prepayment fees with Kabbage’s six- and 12-month, so you can actually save on interest if you repay your loan before the term ends. However, there are repayment fees for its 18-month lines of credit.
What Financing is Available from Kabbage?
Kabbage only offers one type of funding to business owners: business lines of credit.
Kabbage Line of Credit for Businesses
With a business line of credit, you are initially approved for a set amount of money at a certain interest rate for a period of months.
Withdraw as little or as much from this line of credit as you need using either an online or mobile app request, or the no-fee spending card.
If you don’t withdraw the entire amount at once, or you repay a portion of your credit line, you can withdraw more money, up to the full amount of your credit limit. Repayment is made automatically each month, making payments predictable for business owners.
Kabbage offers lines of credit up to $250,000, making them a great option for businesses that have big purchases planned.
Summary
Financing for business owners who have less-than-perfect credit or who need quick access to cash can be difficult.
With Kabbage, there are no minimum required credit scores to qualify for revolving business lines of credit, and borrowers can get access to their funds in just a few minutes after being approved.
The application for Kabbage is quick and easy, and you can complete it online or through their mobile app.
Kabbage does have higher interest rates than many other lenders in the industry, ranging from 24% to 99% annually. Repayments are done monthly and lines of credit come with repayment periods of six, 12, or 18 months.
As one of the most recognizable names in business lending, Kabbage has made its mark on the industry since its founding a decade ago.
Frequently Asked Questions
Who’s eligible for funding through Kabbage?
Kabbage has no official minimum credit scores to qualify for funding, but some average requirements for lines of credit up to $100,000 include:
- Annual revenue of $50,000, or $4,200 per month
- Credit score of 550
- At least one year in business
For lines of credit over $100,000, Kabbage typically requires:
- Annual revenue of $1 million, or $125,000 monthly
- Credit score of 680
- At least three years in business
How much are Kabbage interest rates?
There are no initiation fees if you choose Kabbage. However, you will pay interest fees between 24% and 99% annually.
For Kabbage’s six- and 12-month products, borrowers pay more in interest in the first few months - the first two months for six-month borrowing and the first six months for 12-month borrowing.
You can save some money on interest by repaying the six- and 12-month products early, but there are prepayment penalties if you pay off the 18-month product early.
Is it easy to qualify for Kabbage loans?
Kabbage doesn’t have specific minimum credit score requirements, and they do take into account other financial information about your business when making their determination.
Will I be charged more if I pay off my loan early?
If you opt for the 18-month repayment term, yes, you will pay a prepayment fee. However, there is no prepayment fee for Kabbage’s six- or 12-month terms.
What sets Kabbage apart from other lenders?
Unlike many lenders, Kabbage makes it easy for business owners with low personal credit scores to receive funds quickly. Their loans have short repayment periods, but much higher interest rates than their competitors.
Does Kabbage report to the credit bureaus?
Kabbage does not report to the major credit bureaus (Experian, Equifax, and TransUnion), so your timeliness in paying back your loan does not affect your credit in any way. However, if you are delinquent in paying back your loan, they may report to one of the credit bureaus.
What can I use my Kabbage credit line for?
Your business can use your credit line for any business related need such as investing in equipment, inventory, a marketing campaign, hiring staff, and more.
Will the number of loans I take from my credit line be limited by Kabbage?
As long as you have funds available, you can withdraw up to once a day.
What is the Kabbage Card?
The Kabbage Card allows you to take out a loan using your available business loan funds. This card can be used online, at a point-of-sale checkout, or anywhere where VISA is accepted. This card allows you additional access without extra fees.
Can I check my Kabbage account from my phone?
Kabbage offers an Android and iPhone app that allows you to access your credit line, make payments, and manage your account.
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