Kabbage is a small-business lending platform that accepts borrowers with a FICO score of 640 or higher. Kabbage, acquired by American Express in 2020, is known for its streamlined application process. It allows borrowers to connect their business checking accounts and receive a decision in minutes in most cases.
One of the things you’ll like about Kabbage is the small business lender’s simple eligibility requirements:
You’ll need to be one year in business, with $50,000 in annual income, and a personal credit score of a minimum of 640 to qualify for a line of credit up to $150,000. Furthermore, starting in August 2020, you must have previously worked with Kabbage or American Express, the lender’s new owners.
Kabbage may be a viable choice for business owners who have had trouble qualifying elsewhere owing to personal credit difficulties. Rather than relying exclusively on your personal credit score, Kabbage examines your company’s bank account data. Kabbage also provides rapid finance, with funds arriving in your business bank account within three working days.
The Benefits of Kabbage Loan
One of the things we enjoy about Kabbage is that the lender is more concerned with a company’s financial soundness than its owner’s credit score. However, a 640 credit score is required to apply for a Kabbage line of credit.
In addition, you must have been in business for at least a year and have received prior funding approval from Kabbage or an American Express business card that has been in use for at least two months.
Finally, to qualify for a line of credit up to $150,000, you’ll also need $50,000 in annual revenue. In addition, Kabbage will assess your company’s online bank accounts to establish the terms of your line of credit.
The Drawbacks of Kabbage Loan
Kabbage’s pricing structure is also a little perplexing. Kabbage employs a monthly charge rate instead of interest rates. This cost varies between 0.25 and 3.5 percent of the total line value. It may not be ideal for all business needs because it only offers short-term lines of credit.
Furthermore, Kabbage isn’t a viable choice if you need a term loan for more than $250,000 or a period of more than 18 months. Only a line of credit with a limit of $250,000 and periods of 6, 12, or 18 months is available from the lender.
Kabbage’s line of credit can be a realistic alternative for borrowers with fair credit. It offers convenience and flexibility to borrowers who need immediate access to cash or have had trouble being approved by other lenders.
If you have the financial means, you should look into other lenders to see if you can get a better deal. It is also ineligible for businesses seeking a term loan or funding of more than $250,000.
How A Small Business Loan Can Help You In Saving, Maintaining, Or Expanding Your Company
A business loan is a product that can be used to raise funds for business expansion or developing or expanding your company. If your financial profile and bureau score are good, you can get these loans without putting up any collateral.