4 out of 5 stars
via Kabbage secure site
Kabbage can provide you with anywhere from $2,000 to $250,000 in additional funding.
All of the funds are provided by Celtic Bank, an FDIC industrial bank based in Utah. In addition to streamlining the application process, Kabbage has made its business more consumer-oriented by making funds available very quickly, sometimes within a day.
Kabbage is a somewhat unique choice for small businesses looking for financing in that it provides borrowers with a line of credit versus a lump-sum loan.
This means that you can have control over when you take your money out, and this can be more economical since you only have to pay fees on your loan amount.
But what are Kabbage business loan requirements? Find out if Kabbage is right for you.
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When Are Kabbage Loans A Good Option?
Getting a Kabbage loan may be a smart move for your business if getting cash fast is necessary. It takes just minutes to apply for funding, and you can do it from any computer or device.
When you first go to the website, you can enter your email address and choose a password to create an account.
You’ll then be asked to link your business accounts.
Kabbage considers itself a technology company first and foremost, and it has developed the ability to quickly review applicants’ information and determine what, if any, amount of funding they can qualify for.
This is in stark contrast to physically going to a bank with paperwork in hand and then waiting days or weeks to get approval.
With Kabbage, a decision on your loan can be made the same day as you apply.
You could see funds within 1 → 3 business days if you have a traditional account. If you have a PayPal business account, the funds can be transferred almost instantaneously.
How To Access Your Kabbage Funds
Whenever you need additional money, you can go online, either through the website or through the Kabbage app, and withdraw funds.
You can do this once every 24 hours so that you can have money to fix issues, pay employees or vendors, or invest in new opportunities.
With the optional Kabbage card, you can access your credit wherever you may be. This is helpful when you want to charge large purchases to your account.
If you lack good personal credit, you don’t have to worry as much when you apply for a loan through Kabbage as you would a big bank. That’s because the overall business performance is taken into account rather than just your personal credit score.
Additional factors that are examined include revenue consistency and cash flow.
With a credit score that’s not where you’d like it to be, you might not get the entire amount of funding that you were hoping for, but there’s a good chance that you can at least get some funding.
Are Kabbage Business Loans
Right For You?
In an increasingly competitive landscape of lenders, Kabbage stands out because of the quick access to capital that it can provide.
With terms of either six or 12 months, loans can be paid off fairly quickly. Within a year’s or half a year’s time, your entire project can be seen to completion. This type of loan structure can work well for funding short- to medium-term projects.
A Kabbage loan can also be ideal if you need a financial buffer during short periods of hardship. For example, if you have the same amount of bills each month but are faced with a seasonal drop in revenue, you may need extra funds to cover your expenses. There is no need to wait for a traditional loan approval.
Kabbage Fees And Loan Terms
Each Kabbage loan comes with a monthly fee that you’ll be responsible for. That fee could be anywhere from 1% to 10%. The exact rate is dependent on factors that include your credit score and projected revenue stream.
In most situations, you’ll pay a certain fee rate for the beginning of your term, and then that will change toward the end of your term.
Specifically, the first two months of a six-month term and the first half of a 12-month term are usually subject to higher fees. After that designated period of time, your rate could drop to as low as 1%.
You can get Kabbage loans that last either six or 12 months. If you have a six-month loan, you’ll have to pay back 1/6, or 16.67%, of your total loan amount per month. If you have a 12-month loan, you’ll have to pay back 1/12, or 8.33%, of your total loan amount each month. This would be in addition to the monthly fee.
You can simplify repayments by activating autopay whereby fees are automatically withdrawn from your linked account.
Even with autopay in place, you can make manual payments if you wish. If you end up paying your loan off early, you will not be subject to a prepayment fee.
Kabbage Loan Requirements
In order to be considered for a loan with Kabbage, you’ll have to be able to show that you’ve been in business for at least one year.
You’ll also have to have a minimum of $50,000 in annual revenue or have had a monthly revenue of $4,200 for each of the last three months.
These requirements are fairly minimal, meaning that Kabbage is open to many types of entrepreneurs.
Applying for a loan is free when you use Kabbage, and there is no obligation to accept funding if your application is accepted. The bottom line is there are few barriers if you just want to explore your options.
Pros And Cons Of Kabbage Business Loans
What Kabbage can offer is flexibility. You can apply for a line of credit at any time, and you can hold off on making a decision about the funding until you have all the fees and terms in front of you.
Furthermore, those decisions are offered to borrowers in as little as one day. With a quick response to an application, borrowers don’t have to waste any time with Kabbage.
Of course, the money is really the main attraction of Kabbage. Having the opportunity to get up to $250,000 is hard to pass up if you believe you can turn that money into even more money down the road.
If you are approved for $250,000, you’re not forced to take all of that money at once.
You can choose when to withdraw funds, paying fees on only the actual amount of money that you’ve taken out.
What you will have to remember is that the fees can add up over time. When you’re paying hundreds or thousands of dollars each month in fees, you need to watch your overall spending closely.
Another point is that while the six- or 12-month time frame may seem appealing, it can create a lot of pressure. You’ll have to have a clear plan in place to make sure that you can pay the funds back and cover the costs of the fees.
Kabbage Business Loans Alternatives
If you’re still unsure of whether Kabbage is right for you, you can consider other lenders, including:
5 out of 5 stars
via SmartBiz secure site
Smartbiz deals with greater amounts of money and much longer repayment terms. Their loans can amount to anywhere between $30,000 and $5 million.
The repayment terms can be 10 years up to 25 years. This may be ideal for some business owners, especially those who have long-term plans that involve a lot of moving parts coming together.
Interest rates start at 4.75% and go up to 7%, and you can see your funds transferred in as little as one week after your application is processed.
4.5 out of 5 stars
via OnDeck secure site
OnDeck offers something similar to Kabbage with lines of credit up to $100,000. These lines of credit come with interest rates of 9.00% → 99%.
Their other option is a term loan up to $500,000 with interest rates as low as 9.00%.
These loans can be short-term ones, between 3 and 12 months, or long-term ones, between 15 and 36 months.
|FUNDING CIRCLE SPOTLIGHT|
3.5 out of 5 stars
via Funding Circle secure site
Funding Circle can provide you with funds within days of submitting your application.
The funding options start at $25,000 and go up to half a million dollars. That money, which is provided by peers instead of banking institutions, comes with terms between six months and five years.
Starting as low as 4.99%, interest rates are relatively low in comparison to other types of alternative lending.
Kabbage Business Loans Summary
Whether you choose to pursue funding through Kabbage may depend on a few things. First, you have to think about whether you need your money immediately. If you do, Kabbage can get you the financing you need to keep your business moving forward.
Second, the company has structured its lending options so that loans can be paid off within a year. To avoid getting in over your head in payments, you need to have achievable short-term goals.
Finally, you may appreciate the line-of-credit approach. You can have complete control over when you take out funds and how much you take each time. The minimum amount that you can withdraw is $500, and when you use a Kabbage Card, there is no minimum.
The drawback to all of this is that you only have a short time to repay the money. If you think you can handle that financial responsibility, you may want to take a long look at Kabbage.