Kabbage 2018 Review
Since its founding in 2009, Kabbage has provided quick funding for short-term loans with short repayment periods of 6 to 12 months.
These business loans are ideal for business owners who have a low personal credit score and can’t get approved for a lower-interest loan. They focus more on your accounting, banking, and e-commerce information.
Before lending to you, Kabbage takes several factors into account, such as your monthly revenue and the number of years you’ve been in business. They require that you must have been in business for a minimum of 12 months, have an open checking account, and if you have been using any accounting software, it must have been open for 3 months. You must also earn at least $50,000 a year or earned $4,200 in the previous 3 months. These affect your final terms like your fees, interest rates, and credit limit.
Although they do not have a minimum credit score set, Kabbage states that the average borrower has a credit score of 500. They also pull your credit report during the application.
Kabbage does not take your business credit score into account or work with business that have over three non-sufficient fund transactions in 90 days, are nonprofit organizations, or have high balances with other lenders. However, they may work with business owners who have declared personal bankruptcy one time, but only after a year has passed since the bankruptcy has been discharged.
You can apply online at www.kabbage.com. During this process, you won’t have to speak with a representative since the application is done completely online through an algorithm. You must submit an email and password, and then provide business information that includes your business name, address, and phone number. They will ask questions regarding your industry type, company structure, and the date your business was established. If you own a business that is not a sole proprietorship, you will need to provide your Tax ID number.
Kabbage’s application process requires you to connect the company to an active business checking account, a payment service like PayPal, or bookkeeping software. You can also connect them to one of your other business accounts like Amazon, eBay, Square, Quickbooks, Etsy, Yahoo, Square, Authorize.net, Sage, Stripe, or Xero. You must prove that you are connected to the business and that you have a minimum bank balance of $2,500. Kabbage does not require a personal guarantee to receive a credit line.
In some cases, you may have to provide extra documentation or Kabbage may review your application manually, which may take a few extra business days.
Your loan details are provided on a SMART box on the site, allowing you to check your APR and monthly payment before you decide to take out the loan.
This application takes anywhere from a few minutes to 5 business days to process. If you are approved, your funds arrive in a few business days. If you are denied for a loan, you must wait 6 months to a year before reapplying. Kabbage will ask Experian to perform a hard credit pull during the final step of your application, which will affect your credit score slightly.
Depending on the documentation you must provide, you may receive your funds on the same day or up to 7 business days. Kabbage will file a blanket UCC lien on your business once you receive funding.
Once you receive the funding, you can use your credit line up to once a day and pay interest on whatever you use. Once you pay back what you have used in full, your credit line is made available to you again.
You receive your payment date before you start using your credit line, and you are given either a 6 or 12 month loan term during which Kabbage collects payment automatically via your business bank account. Kabbage does not charge a prepayment fee. They also do not report to the major credit bureaus or the business credit bureaus.
You can view your loan terms and payment on an online dashboard. Customer service and technical support are available by email or phone. They also have a social media presence on Facebook and Twitter.
Hours: Monday through Friday 8 am to 9 pm ET, Saturday 10 am to 2 pm ET
- 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: Customers were impressed with how quickly the application and funding process was completed.
- 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.
- Kabbage’s interest rates are higher than most other competitors in the market.
- Repaying your loan early does not have much benefit, since the majority of your interest rate in the first two to six months.
- You do not work with one single representative and you may have to talk to several specialists if you are having any issues.
- The majority of your loan is paid off in the the first few months, which can make paying it off difficult for some business owners.
- If you choose an ACH transfer, it may take several business days for the funds to reach your account. If you need the funds instantly, PayPal transfers are ideal.
- If you begin having business troubles, Kabbage may reduce your credit line or stop it completely. You will still have to pay off any of your debts.
- Kabbage’s APR ranges from 20% to 106%. You pay a monthly fee plus the percentage of the principal, or the total amount borrowed.
- For a 6 month loan term, you pay back 1% to 10% of the total amount borrowed for the first 2 months, and then 1% for the last 4 months.
- For a 12 month loan term, you pay 1% to 10% for the first 6 months of your loan, and then 1% for the last 6 months.
- You may borrow anywhere from $2,000 to $150,000.
- Kabbage doesn’t charge draw fees, origination fees, maintenance fees, or prepayment fees.
- Your payment is collected by monthly automatic payments.
- There are late payment fees that range between $10 and $100.
- If you use Kabbage Card, you can have additional access to your loan funds without extra fees. This card may be used online, at a point-of-sale checkout, or anywhere where VISA is accepted.
Kabbage is ideal for business owners who are unable to be approved for another line of credit and don’t have the best personal credit score. The application is simple, and Kabbage provides transparency in regards to terms and pricing. However, their fees are much higher than other competitors on the market and their repayment is front-loaded, which may make it difficult for borrowers to pay back the loan in full.
Frequently Asked Questions
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.
Who is eligible for Kabbage's line of credit?
Small businesses that make over $50,000 a year and have been in business for more than one year are eligible for funding by Kabbage.
What can I use my 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?
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 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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