Kabbage provides several different loan products. In this overview, we will be focusing on their popular Kabbage line of credit.
The Kabbage line of credit is a fast loan option that can see you accessing a quarter of a million dollars in less than a week.
Kabbage Line Of Credit: Special Qualities & Features
Fast Line Of Credit
Business lines of credit are highly flexible and convenient business loan options. They are even more convenient when they are granted very quickly.
A Kabbage line of credit only takes a few days to get. They aren’t the most accessible alternative business lending option, but the requirements for one are still quite lax.
Term Length Options
Kabbage offers multiple draw period options for their lines of credit. You can ask them for a draw length of 6, 12, or 18 months. So, if you need to handle some foreseeable business expenses, or if you need to have access to funds for an extended period, Kabbage has something to offer you.
Fast & Convenient Application
Applying for a Kabbage line of credit isn’t much of a hassle. The entire process can be done online on Kabbage’s convenient platform. They ask for the same documents that most other alternative business lenders do, so you can expect no extra hassles.
Kabbage’s speed is what stands apart. Assuming your credit score and business financials are decent, you can gain access to a lot of credit very quickly. You don’t even need to do any paperwork as all your documents can be sent to them online.
Pricing & Terms
A Kabbage line of credit comes with one major caveat: a large APR. The APRs on Kabbage lines of credit range from 24% to 99%. Of course, the better your business financials and credit score, the lower your APR will be.
So, Kabbage is a good option for fast business credit, but it is potentially very expensive. You should thus use their line of credit with caution. All things considered, their offer is best when it comes to smaller, recurring expenses. Because of the risk involved, you should hesitate to use their line of credit to finance large, one-off purchases.
You can get a line of credit with a draw term of 6, 12, or 18 months. You pay back your borrowed funds on a monthly basis. The payment includes a percentage of the borrowed funds plus one small fee. If you take a line with a six-month draw period, you will have to start repaying for the first two months once the period is over. After that, you will pay for one month at a time.
Kabbage does not charge any prepayment fees. Therefore, you can pay back your loan as soon as you want to without additional costs.
Do I Qualify For A Kabbage Line Of Credit?
Kabbage’s business line of credit is not the easiest alternative business loan to qualify for. Still, their requirements are still quite lax.
To qualify for a Kabbage business line of credit, you need:
- At least $50,000 per year in revenue
- Alternatively, $4,200 per month over the last three months
- One year or more in business
These are their minimum qualifications. Meeting them should make you eligible for a pool of up to $50,000 in credit. For a larger line of credit, you will need a higher credit score and more experience in business.
When you submit an application, Kabbage will want:
- A connected business bank account (or access to your accounting software)
- Permission for a one-time hard credit pull
Factors To Keep In Mind
Potentially High Costs
Kabbage doesn’t need to be ridiculously expensive. However, it can become so if you fail to make your payments. With APRs ranging from 24% to 99%, you must be especially responsible with the money you borrow from them.
Failing to make timely and complete payments will most likely result in cash flow challenges.
Paying Back Early
It’s wise to pay Kabbage back earlier if you have the opportunity to do so. Unlike many business lenders, they don’t charge prepayment fees on their business lines of credit. Paying ahead of schedule is a great way to responsibly handle a Kabbage line of credit. It’s always better to be safe than sorry.
Kabbage Line Of Credit: The Last Word
Kabbage lines of credit are a great source of fast business funding. They are easy and quick to get and offer you a lot of freedom for what you can finance. They carry few restrictions and are conveniently acquired as well.
The only problem with Kabbage lines of credit are of course their potentially sky-high costs. The Kabbage line of credit is fast and easy to get, but this comes at the cost of much higher risk. So, treat the line of credit with the respect it deserves if you want to benefit from a convenient business loan product.
