Kabbage provides small business loans to all kinds of businesses. The company does a good job of working fast and remaining transparent. But there are certain things that the company’s two loan products excel at. So, let’s look into how the Kabbage small business loans work. Then, we will look over their uses.
Kabbage Small Business Loans
Kabbage is a long-established alternative business lender. The company was formed in 2008 and was one of the early participants in fintech for lending. While most online lenders are fast, Kabbage has a special distinction even among them. It’s even been referred to as the “six-minute lender”.
| Lender | Minimum Revenue | Time In Business | Minimum Credit | Next Steps |
|---|---|---|---|---|
 |
$50,000/yr | 1 year | 560+ | See if you qualify |
Many alternative lenders have followed Kabbage. But Kabbage small business loans have long served as an ideal bank loan alternative. So, while we will get into the specifics of how their loans work, keep in mind:
- All Kabbage small business loans are very fast and good in a pinch
- Kabbage is secure and transparent
- Kabbage is available to business owners with bad credit
Beyond these facts, there are several differences between Kabbage’s lines of credit and term loans.
Kabbage Short-Term Business Loan
Rates & Terms
Kabbage short-term business loans are installment loans of up to $250,000. You can choose your repayment term, which will be between 6 and 18 months.
All Kabbage small business loans carry a strange collection of fees. For example, there is a fee of 1% of principal after the first two months. While these fees are strange, they are in no way hidden. Kabbage includes a full price calculator on its website. You can refer to it to find out about the fee structure and how your rates are calculated. APRs on their term loans range from about 23.99% to 99%. Exact rates will depend on your credit score and business finances.
When To Consider A Kabbage Short-Term Business Loan
If you’re considering a single, large purchase, you should consider a term loan. Any long-term expense will be better-covered by a Kabbage short term loan than a line of credit.
Anything that takes more than a year to have paid off will be better covered by a term loan. That’s because loans are large, carry fixed interest, and are taken for a specific purpose.
Equipment
If you need to purchase new equipment, a term loan is the best way to finance your purchase. Disposable or reusable inventory or equipment can be covered by other, more specific business loans. But expensive, long-term equipment is an investment that can be covered by a business term loan.
Larger Spaces
If you want to expand your business with another location, a Kabbage short-term loan is a better way to cover the lease. Kabbage isn’t a good option for purchasing a large property. But then again, Kabbage is tailored to the needs of small businesses. So, for small business expansions like more locations, it’s better to take a Kabbage short-term loan.
Project Start-ups
If your business is kicking off a new project that will last a few months, a Kabbage business loan can cover the initial expenses. The same can be said if you’re just trying to ramp up a project you’ve already began.
Inventory With Fast Turnaround
Some businesses rely on the fast turnaround of inventory. If that describes you, Kabbage small business loans are a good option. This is particularly true if your inventory is more valuable.
Kabbage Business Line Of Credit
| Lender | Minimum Revenue | Time In Business | Minimum Credit | Next Steps |
|---|---|---|---|---|
| |
$50,000/yr | 1 year | 560+ | See if you qualify |
If you’re looking for a more flexible option, the Kabbage line of credit might be what you’re looking for. If you need funds in a rush, approval for the Kabbage line of credit is just as fast as it is for their term loan.
Rates & Terms
Kabbage offers short-term business lines of credit that can also cap out at $250,000. Their lines can have terms of 6, 12, or 18 months. Requirements are the same as they are for their term loans.
When To Take A Kabbage Line Of Credit
Kabbage lines of credit are better for handling repeated, small expenses. They aren’t appropriate for one-off, serious investments.
Payroll
Many businesses experience financial insecurity. When they do, payroll is the most important expense to cover. A Kabbage line of credit can insure you will be able to cover payroll. This can help you avoid legal penalties and an embarrassment with employees.
Expected Seasonal Cash Flow Problems
Lines of credit are best taken before problems arise. If you run a seasonal business and know for a fact that financial issues are coming, you can take a line of credit.
Fortunately, Kabbage is very fast at providing a business line of credit. So, even if your off season has started, you can get a line of credit to carry you through if you qualify.
What Kabbage Small Business Loans Are Not Good For
Kabbage small business loans are not meant for large businesses. The typical business served by Kabbage is a small family business or a startup.
On the same theme, Kabbage is also not a good lender for very large expenses. If you’re a small business owner looking to take the next major step, keep in mind the company’s $250,000 limit. Also, they only give out $250,000 to the most qualified borrowers.
Do I Qualify For Kabbage Small Business Loans?
Qualifying for Kabbage small business loans isn’t difficult. But the company does still have a few requirements.
You can read our Kabbage qualifications guide here.
