Kabbage Review

If you’re considering a Kabbage loan, or are trying to secure a loan for your small business, keep reading this Kabbage review.

Kabbage gives you quick access to working capital through a line of credit.

Because even if you have a low credit score, Kabbage may still give you a line of credit.

Let’s start with the pros of a Kabbage loan first (like their unconventional underwriting and easy application process), before we get to the downsides (like interest rates for some customers).

Who Would Benefit From a Kabbage Loan?

Whether you need single or multiple lines of credit in your bank account or PayPal, a Kabbage small business loan is perfect you if:

  • May have imperfect credit or a low credit score.
  • You may need fast cash and/or a line of credit
  • Okay handling a short repayment loan terms

Business owners who don’t have perfect credit typically have a difficult time securing a loan through traditional means.

Kabbage makes it easy to get working capital because of its application process.

Underwriters base decisions on checking account information, e-commerce data, and actual or projected annual revenue.

If you need fast cash and can make the monthly payment, you may receive a loan amount of up to $250,000 in your checking account within a few days.

Underwriters base decisions on checking account information, e-commerce data, and actual or projected annual revenue.

Kabbage loans are also ideal for instant cash flow if you can repay the loan within 6, 12, or 18 months.

Kabbage Review: Pros

There are several reasons why Kabbage loans may be a good idea such as:

  • Fast cash with a simple, paperless application process
  • Credit history is not the only consideration when approving a loan
  • No prepayment penalty – built on a short-term loan structure

Kabbage does not go through a rigorous loan process like a traditional lender. Instead of filling out paperwork, all applications and transactions are completed electronically. Once the repayment terms are set, you can get a line of credit in your bank account, credit card account, or PayPal.

You can also connect Kabbage to your QuickBooks, Square, Etsy, eBay, Xero, or Amazon accounts. To make things even easier, Kabbage also offers a credit card with zero fees. The Kabbage Card gives you instant access to your line of credit.

Kabbage considers more than just your bad credit when deciding your credit line.

Kabbage considers more than just your bad credit when deciding to give you a credit line. Like many online lenders, underwriters look at the data from your business and personal accounts.

They also review your monthly revenue and the length of time you have been in business. So, there is more flexibility with loan amount and the repayment terms.

Kabbage Review: Cons

With all the benefits of using Kabbage loans, there are some red flags including:

  • You will pay high rates – some of the highest in the lending industry.
  • There is a monthly fee and a complicated fee structure.
  • Although there is no prepayment penalty, there is also no incentive to pay the loan early.

In a perfect world, you can weather a loan with high loan rates and a complicated fee structure. You simply generate your expected revenue and pay the loan off early.

You can weather high loan rates simply by paying the loan off early.

However, Kabbage is counting on the fact that you won’t. This is why they have an annual percentage rate of 24% to 99% (yes, you read that right).

If you look at Kabbage reviews from previous customers, you will quickly discover that the interest rates and fees are the subjects of most complaints.

Kabbage loans are ideal as long as you plan to back the loan fast.

The Kabbage credit line also comes with a complex fee structure that begins in as little as 60 to 90 business days. The terms loans are as follows:

  • A monthly payment to the principle
  • A monthly fee
  • Loan fee of 1% to 10% for the first two months
  • Loan fee of 1% every month after

Once you receive your Kabbage line of credit, you pay the same fees whether you have a six-month loan or a twelve-month loan.

With all the fees, you would think that small business owners would have an incentive to pay Kabbage business loans off early. However, the opposite is true. Why?

If you pay all your fees upfront, there is no incentive to pay the loan off early. It does not even matter that Kabbage does not charge a prepayment penalty. Most small business owners will allow the loan to finish out the term before paying it off.

Kabbage Review: Bottom Line

Kabbage makes it easy for you to get a small business loan by simplifying the application process. However, their interest rates are higher than most competitors, and they have a complicated fee structure.

The bottom line? Go with Kabbage if you plan to pay it back in 6, 12 or 18 months.

Kabbage.com is where you begin to fill out your business information and apply for a loan. Kabbage is a safe platform. So, you do not have to worry about submitting your financial information.

While there are some negative Kabbage reviews out there, it has an overall positive rating with the Better Business Bureau. Before you choose Kabbage as your lender, you need to establish your business needs.

The good news is that regardless of your personal credit score, you may still qualify for a business line of credit or a small business loan.

However, Kabbage does charge high-interest rates. So, you should only use Kabbage if you can pay off the line of credit within six, twelve, or eighteen months.

Leave a Reply

Your email address will not be published. Required fields are marked *