Kabbage Vs Fundera Comparison

kabbage vs fundera
Kabbage and Fundera provide business owners with a streamlined, short-term source of funding. Both companies offer business loans or lines of credit in amounts up to $250,000 over six-month or 12-month periods.

But the similarities end quickly because Kabbage and Fundera are distinctly different. Kabbage is a lender whereas Fundera is a loan broker.

Kabbage offers businesses fast access to cash when they are struggling to secure financing from traditional lenders while Fundera is a loan broker that connects borrowers to a variety of lenders.

Below we compare Kabbage vs Fundera to help you decide which firm can provide the financing you need for your business.

Kabbage Spotlight

Kabbage was established in 2009 and loans approximately $1 billion annually to business borrowers.

Over the years, Kabbage has been named on Inc.’s 500 Fastest-Growing Companies roster, Forbes FinTech 50 and Entrepreneurs‘ Best Entrepreneurial Companies in the United States of America.

The awards have come fast and furious for Kabbage not least because of its simple application process and its quick turnaround to funding.

KABBAGE SPOTLIGHT

kabbage logo

InvestorMint Rating

4 out of 5 stars

  • Credit Line Limit: $250,000
  • Approval Time: 10 Minutes
  • Term Length: 6-12 Months
  • Fee Rates (monthly): 1.5% – 10%

via Kabbage secure site

Fundera Spotlight

Founded in 2013, Fundera is based in New York City.

Unlike Kabbage, which is a direct lending firm, Fundera works with a number of lenders to help you find the quick cash or credit line you need for your business.

It has facilitated more than $750 million in loans for over 10,000 small businesses.

Fundera also made the Inc. 500 list of Fastest-Growing Companies in 2018 as well as Crain’s 100 Best Places to Work in New York City in 2017.

Its popularity is based in part on its variety of financing options for small businesses that need capital.

FUNDERA SPOTLIGHT

fundera logo

Investormint Rating

4.5 out of 5 stars

  • Loan Amounts: $2,500 -> $5,000,000
  • Short-term Loans: 12 -> 24 months
  • Loan Timelines: Up to 25 years

via Fundera secure site

Loan Amounts &
Loan Terms Comparison

Kabbage offers term loans and lines of credit in amounts ranging from $500 to $250,000 with APRs ranging from 24% to 99%. These ranges give you a choice of 6-month or 12-month terms.

Fundera facilitates short-term loans for 12- to 24-month periods. It brokers other financial products as well. For example, Fundera can arrange Small Business Administration (SBA) loans up to $5 million for up to 25 years.

AmountInterest RatesTimeline
Kabbage$500 → $250,00024% → 99%6 → 12 months
Fundera$2,500 →  $5,000,0006.75% → 36%12 → 24+ months

Funding Timeline Comparison

Because Fundera brokers several types of business loans, its funding timeline varies. For example, you may be able to obtain a business line of credit or a short-term loan in a matter of hours whereas an SBA loan may take several weeks.

Kabbage has specifically designed its application process to be quick. Once you provide a link to your business accounting platform and your credit information, you can expect a funding decision within hours.

Fee Comparison:
Kabbage Vs Fundera

A Kabbage loan has no origination fee. You can repay early without penalty.

If you have a line of credit, you only pay interest on what you have actually borrowed rather than on the funding limit.

Over the first few months of your short-term loan, you will pay the bulk of your finance fee.

On a 6-month term, for example, you might pay 10% interest per month for the first 60 days and then around 1% for the remaining months.

For a 1-year term, you may pay up to 10% interest per month for six months and then around 1% monthly for the remainder of the year.

Fundera offers a number of different loans from various financial vendors, so you can expect the fees to vary according to this wide range of options.

Some of the fees that different lenders may charge include:

  • Loan origination fee, usually a percentage of your loan amount
  • Application fee
  • Guarantee fee for an SBA loan
  • Prepayment fee for paying off your balance before the term is up
  • Factor rate on cash advances
  • Check payment fee if you elect not to use automatic withdrawals for loan payments

The interest rate on the loan you secure from Fundera depends upon the lender’s terms, but you will typically pay between 6.75% to 36% annually.

Why Choose Fundera?

If you are shopping for business loans that meet certain criteria, you will find more choices through Fundera.

Unless you and your firm have a good to excellent credit history, however, you may not find the terms you are looking for on this loan brokerage site.

If you qualify, you can borrow as little as $2,500 or as much as $5 million through Fundera’s array of business loans.

Fundera offers personal business loans for up to $35,000, startup funding for business ventures in amounts up to $150,000 and equipment financing for up to the purchase price of the goods.

Of course, the maximum you can qualify for may not be the maximum allowed. To be eligible to borrow money for your business through Fundera, you must meet the individual lender’s criteria, and your eligibility depends upon:

  • How long you have been in business, with two years as a minimum
  • Your consistent monthly business income, which must start around $10,000 per month
  • A credit score exceeding 620 to get an affordable interest rate

You must repay the amount you borrowed, plus interest and any financing fees, over the term of the loan.

With Fundera, you make a preset payment once per month until your outstanding balance is zero.

You can choose to pay an extra amount monthly if you wish to repay the loan earlier than the term, but because Fundera sources various lenders, be aware that your loan might have an early repayment penalty.

Funding time for a loan through Fundera can be as little as a day for a business line of credit or a short-term loan. However, it can take up to 21 days to fund an SBA loan.

Why Choose Kabbage?

Kabbage simplifies the business financing process by offering a basic 6- or 12-month loan or line of credit. The loan is fee-free and funds quickly.

Loans or lines of credit range in size from $500 to $250,000. The amount you qualify to borrow depends on your business needs and your eligibility.

Kabbage determines your eligibility for a loan primarily by reviewing your company’s performance.

You provide a link to your accounting system, such as QuickBooks or PayPal, and Kabbage securely evaluates your creditworthiness, cash flow and profitability.

In general, you need to be in business for at least a year and to have at least $50,000 in annual revenue or $4,200 in monthly revenue for the previous three months to qualify with Kabbage.

You won’t make payments on your loan until you begin withdrawing money. Kabbage enables withdrawals with three tools:

  • Online dashboard
  • Mobile app
  • Kabbage card

Kabbage calculates your monthly payments based upon the amount of money you have withdrawn to the current date plus applicable interest.

This online lender can process your loan application in as little as 10 minutes.

Once Kabbage approves you for a loan, you can expect funding in as little as 24 hours.

Kabbage Wins Vs Fundera Wins

Kabbage WinsFundera Wins
Struggling To Find Traditional Financing: If you are having trouble qualifying for traditional financing, Kabbage may offer a solution.Competitive Rates:  If you want a leaner rate, Fundera may provide a better option. The APR rate on a Fundera loan can be as little as 6.75% or as much as 36%. It depends on the type of funding for which you qualify.
Looser Qualifications: Overall, Kabbage’s qualifications for lending are more relaxed than Fundera’s requirements. If you have past credit issues, you are more likely to qualify for a Kabbage line of credit.Greater Loan Selection: As a loan broker, Fundera provides more choices so the chances are higher you will find a loan that matches your needs.
No Origination Fees: Kabbage does not charge a loan origination fee or an application fee.Higher Loan Amounts: Fundera offers SBA loans of up to $5 million for those who qualify. Kabbage limits its funding to a maximum of $250,000.
No Pre-payment Penalty Fees: It does not charge a penalty for early loan repayment. Fundera lenders may tack fees onto some of the loans they offer, so you need to be more wary.
Fast Funding Timelines: Kabbage loans fund within 1 → 3 business days. Some of the lenders Fundera works with will process your application just as quickly, but others will take longer.
Streamlined Application: Kabbage streamlines the process by linking directly to your accounting system whereas Fundera loans require a more traditional application process.
User Experiences: The user experience is simpler at Kabbage because it only offers a couple of financing options.
Repayment Criteria: Because Fundera deals with a number of lenders and types of loans, you may find that the funding you qualify for has strict terms for repayment. Kabbage loans must be repaid within the specified time period, but you can pay off your funding early if you wish.
Note: You will pay between 1.5% and 10% interest monthly for your balance on a Kabbage line of credit.

What you pay depends upon how well your business has been performing. For example, if you borrow $2,500 for 12 months and pay an average of 3% per month in interest, your total finance fee will be $6,000, which amount to an APR north of 42%.

Kabbage Vs Fundera
Comparison Summary

Kabbage and Fundera have different business models so it’s not exactly an apples to apples comparison but the highlights of each are captured below.

The advantages of Kabbage include:

  • Less stringent credit score requirements
  • Quicker funding overall
  • Lower rates for better business performance

Fundera’s best points include:

  • A variety of funding choices
  • Lower rates for higher credit scores
  • More versatility in terms of loan types

As the person who best knows your business, your capital needs and your ability to repay, your choice of online lender for short-term funding should be the one that makes the best sense for your long-term business goals and that bolsters your bottom line.

If you need to borrow more capital over a longer term and want a better rate of interest, you may want to explore more traditional financing options.


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