Kabbage Inc. was founded by Rob Frohwein, Marc Gorlin, and Kathryn Petralia in 2009. Kabbage is a financial service technology and data platform based out of Atlanta and Georgia. It expanded in 2011 to begin offering loans.
Kabbage is the right choice for people who:
- Have a low personal credit rating: Kabbage will focus on the important details such as banking, accounting, and e-commerce before granting loans. This makes it ideal for entrepreneurs that have a rocky credit history.
- Need money quickly: It takes just a few minutes to complete the Kabbage online application process. Loans and loan extensions are then approved quickly with the money being transferred to your account within a couple of days.
- Want a shorter repayment period: Kabbage loans of up to 150,000 are offered to borrowers with repayment terms of between 6 and 12 months.
Why Choose Kabbage
- Quick and easy access to money
Kabbage is a great alternative for entrepreneurs that need money quickly and don’t mind paying a higher rate in exchange for speed. There is no need to do any paperwork when applying; all you have to do is provide some business financial records and a payment platform or bookkeeping software account such as PayPal. You can also provide Kabbage with access to other accounts such as Esy, QuickBooks, Xero, eBay, Amazon, and Square.
- Is accessible to entrepreneurs with poor credit
If you aren’t able to be approved for a less expensive loan then Kabbage is a great choice. They regularly issue loans to borrowers with credit scores of at least 500. If you’re considering getting a loan then it’s important to understand your credit limit and the charges attached to the loan.
What to Consider
- High Rates
Kabbage charges yearly percentage rates of between 24% and 99% making it an expensive loan option. Avoid using a Kabbage loan for something such as renovating or acquiring property as these should be funded with loans that have longer terms and lower rates.
- Fee Structure
Kabbage has a complicated fee structure. Each month you will pay back some of the loan amount, the principal, and a fee. For the first six months of the loan period, borrowers will be expected to pay back a fee of between 1 and 10% of the total amount borrowed for the first two months.
- Little Incentive to Repay Loan Early
Given that you will be paying back a large chunk of the loan to Kabbage within the first 2-6 months, you won’t profit much from paying back the loan early even though Kabbage doesn’t charge repayment penalties.