Whether you're running a young startup or a long-established SME, getting speedy access to the capital you need can be a major obstacle. Keenly aware of this, the people behind Kabbage launched their service in 2009 to provide an option for businesses and entrepreneurs looking for quick, hassle-free financing without the excessive wait times and barriers that accompany traditional forms of financing.
Since then, they have provided hundreds of millions of dollars worth of funding to businesses across America, across every conceivable industry. While Kabbage loans may not be as well known as some of its competitor companies, there are certain advantages to turning to them for a loan, depending on the type of borrower you are. Scroll down to read through our comprehensive Kabbage reviews page and find out everything you need to know about this provider.
What Are Kabbage Loans?
Before I dive into Kabbage loans, it's worth quickly explaining what is Kabbage. Kabbage is a company that considers itself to be unlike "typical" market providers. They have won numerous fintech awards and are frequently described as "disrupters" and "innovators". This is due largely to their user-friendly, technology-based platform, which business owners can use to access funding with just a few quick clicks.
They are backed by capital giants such as SoftBank, Santander, and KPMG, which suggests that Kabbage funding is most definitely on solid ground and that they are a trustworthy provider. Kabbage business loans are all about quick access and quick repayment. While a borrower can lend up to $250,000 at a time, their repayment terms a strictly limited to 6, 12, or 18 months. While this may seem daunting for some, others will likely find relief in the prospect of having a short, straightforward relationship with a lender.
How Does Kabbage Work?
Kabbage instant financing does pretty much exactly what it says on the cover. Borrowers can use their online platform to instantly apply for funding and can even receive it on the same day. The application process, which we will look at in greater detail later, requires no paperwork whatsoever. Kabbage business loans are accessed simply by creating an online account and connecting your business checking account to it, as well as some bookkeeping software. Once you have done this and submitted your application, Kabbage will decide whether to provide the capital you are seeking for your business.
However, while the speed of this company is virtually unmatched within the industry, you will pay for the privilege. Kabbage interest rates are most definitely on the higher end of the spectrum in my experience, with annual rates ranging from 24% to an eye-watering 99%. Of course, your own interest will depend on the amount you borrow and what your credit history looks like. In addition, when making your monthly repayments, you will also need to pay a fee on top of the initial amount borrowed. This ranges from between 1%-10% per payment and often operates on a complex sliding scale.
How Do I Quality for a Kabbage Loan?
One of the key appeals of this provider is that Kabbage loan requirements are lenient and generous, to say the least. There is no minimum FICO requirement needed to apply for Kabbage small business loans, meaning that borrowers with a rocky credit history need not be deterred. However, when applying you are required to submit to a one-time credit check, which Kabbage will use to determine whether or not to grant you the loan, as well as determining repayment terms.
Kabbage financial requirements are incredibly straightforward. To qualify for a loan, you need to be able to prove that your business has a minimum revenue of $50,000 a year. However, you can skirt around this is your business has enjoyed at least $4200 in revenue for at least the past 3 months. It is mandatory that your business has been up and running for at least 12 months before the date of the loan application. This is non-negotiable.
If you meet these basic qualifications, you will quickly realize that Kabbage payment processing is instantaneous and hassle-free, with the loan amount being credited to your business account within hours.
Advantages and Disadvantages of Kabbage Business Loans
There are a number of advantages and disadvantages to seeking funding from Kabbage. As I mentioned above, whether Kabbage is right for you will depend largely on the type of business you run and the cashflow needs you are currently experiencing. Here are the key advantages and disadvantages of Kabbage business loans.
- Fast access to cash. If your business needs immediate funding to cover cash flow shortfalls or an unexpected expense, Kabbage is definitely a worthwhile provider for you. You can apply for and receive hundreds of thousands of dollars of business funding on the same day, something which few other providers can match.
- Great for borrowers with low credit. Kabbage does not stipulate that borrowers need to have a minimum FICO score before applying, and they have a proven track record of accepting people with lower credit scores. This makes them a great option for those looking to recover from a rough patch.
- A unique credit model that allows borrowers to only use the money that they need. This means that if you end up borrowing more than you actually need, you won't be penalized with excessive fees and will able to return that excess cash.
- A Kabbage debit card that you can use anywhere. This will make it easier to use your loan for your business needs without having to endlessly transfer cash between accounts.
- Paperwork and hassle-free application process. Borrowers using Kabbage will not have to waste time and expense on gathering mountains of paperwork, as you would often have to do with a traditional loan provider or a bank.
- Stellar customer service and friendly staff members available 7 days a week.
- Some of the highest interest fees on the market right now. With annual percentage rates that can reach 99%, borrowers should only use Kabbage if they are confident of meeting these terms.
- A complicated fee system. Their system of charging repayment fees of between 1-10% is opaque and it can be very difficult to figure out how much you should be putting aside to meet your repayment obligations.
- There is no incentive to repay your loans early. While other companies offer perks to borrowers who repay early, Kabbage's fee system means that you will pay a lot more out of pocket in fees if you pay more than is necessary during the first few months.
How Do I Apply?
As mentioned, applying for Kabbage loans is a hassle-free process that requires no paperwork. You should be able to give them all of the information they require using your laptop. In a nutshell, this is the application process:
- Go to the Kabbage website and click Apply Now.
- Enter your personal details and email address, then click Get Started.
- Fill out the required fields with information about yourself, your financial information and your business.
- Give your consent that you will submit to a credit check.
- Click Submit.
Documents Needed to Apply
While no paperwork is involved in the process, you will want to have certain documents and information handy when you set up your account. Here is what you will need:
- Annual revenue
- Information proving that your business has been running for 12 months or longer.
- Address and phone number
- Tax ID number
- Tax ID Type of entity
- Type of customers
- Bank statements for the past three months
Kabbage Loans for Bad Credit
As many of the other Kabbage loan reviews I have read will tell you, a major advantage of this provider is that they happily cater to borrowers with poor credit. While no minimum score is required to apply, reviews for Kabbage small business loans have noted that you are more likely to be accepted if your credit score is within the 'fair' to 'excellent' range. Kabbage loans bad credit policy is intentional. Kabbage was founded in the aftermath of the 2008 crash, and a central part of their ethos is to help entrepreneurs get back on their feet after a rough patch.
Kabbage customer service enjoys a strong reputation among borrowers, with reviewers typically highlighting how accessible customer support is, and the friendliness of Kabbage employees. Kabbage business funding activities are also publicized on their active Twitter account, where they also respond to queries from current and prospective customers in a flash. I also found that they are easy to reach, friendly, transparent, and understanding.
In conclusion, we think that Kabbage loans are recommended for business owners who need fast access to large amounts of cash. Their high-interest rates mean that those who do not urgently need a cash injection, or who would prefer a different financing option such as a line of credit, may be better served by a traditional provider. Kabbage loan requirements are minimal and transparent, meaning that borrowers with poor credit or a lack of experience are welcome here. As the Kabbage reviews already tell us, their lending model is all about speedy, straightforward loans to businesses that need it.