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Kabbage Business Loans Review

Anne Miller

Anne Miller

Senior Author

Anne Miller

Senior Author

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As everyone knows by now, starting a business is really an enormous venture requiring lots of preparation and research. But aside from that, more often than not, it also requires significant amount of money to serve as capital. And this is where most new entrepreneurs encounter their first major problem – raising funds. This is what online lending company Kabbage aims to address. The company aims to provide new entrepreneurs and small business owners a fast and easy way to obtain loans and additional funding that are otherwise harder to get from other funding institutions like banks. But is it any good? Read on to find out.

What is Kabbage?

Kabbage is an online lending platform that caters to first-time business owners and small business entrepreneurs. According to its website, it provides a variety of financing options and business loans, ranging from initial capital requirements to equipment and inventory funding. It has been in operation since 2009, and according to their financial report, it has already approved a total loan amount of $4 billion to more than 100,000 small businesses.

Below are some of the loan options they offer:

  • Unsecured Small Business Loans (lines of credit, working capital, inventory loans, etc.)
  • Secured Small Business Loans (equipment loans, SBA loans, etc.)
  • Industry-Specific Loans (construction, beauty salons, trucking, etc.)
  • Minority Loans(business loans for women, veterans, and more)

Kabbage also offers invoice financing for small business. This is a service wherein a client can issue an invoice through Kabbage, and the customer or client you sent the invoice to can apply for financing options from Kabbage to pay off the amount of the invoice you issued – all at no additional cost. This gives your customers financial flexibility while assuring that you get paid on time.

Kabbage Business Loan Review

What is the application process?

Kabbage is not the first financing company to offer an online approval process. But other competitors usually have a complicated application process that takes a lot of time. Kabbage, in contrast, is positioning itself as one of the fastest in terms of qualifying and approving loan requests. Kabbage says in their website that you can have access to additional funds in minutes, and various online reviews of clients that have availed their services agree with this.

To apply for one of Kabbage’s loan packages, you will have to fill out an online form or facilitate the application over the phone. Kabbage does not require paperwork. Rather, you will need to give them your online banking information and other online financial accounts you may have (e.g. PayPal). Kabbage will partner with them to assess your eligibility (should you be approved for a business loan, monthly payments will also be deducted from one of your online bank accounts.) Depending on the kind of business you have and the amount you are asking for, Kabbage may ask you about your current income information.

The good thing about Kabbage is that, according to their website, you will already know if you are qualified or not in just 10 minutes. You also do not need to pay anything upfront for the assessment, and you are not required to avail their services if you find that their offer is not within your budget.

How much can I get and what are the terms?

Considering that Kabbage welcomes clients who are mostly new business owners, it has a rather enticing loan package. Applicants can avail up to $250,000, depending on a number of business and financial factors.

As for the terms, Kabbage does not offer an annual percentage rate (APR) model that banks and other lending institutions usually use to compute for premium payments and interest rates. Rather, it charges a varying monthly fee for a line of credit. Kabbage charges a monthly fee between 1.5% to 10%, and clients can apply for a loan with either six-month or 12-month loan terms. The monthly fees are not fixed, and are skewed towards a bigger payment amount in the first few months.

A sample computation would be as follows: If you applied for a loan amounting to $50,000 loan with a payment term of six months, you would have to pay $10,333 for the first two months (a combination of principal payment and fees), and $8,333 for the rest of the remaining four months. At the end of the term, you would have paid a total of $6,000 in fees for a $50,000 loan.

Another advantage Kabbage is offers is that they do not charge any pre-payment fees. So if at any point during the term you were able to acquire a windfall or a huge surge in sales in your business, you can pay off the entire loan amount without any additional charges or fees.

Who is eligible?

Unlike most banks and other lending and financing institutions, Kabbage only has basic requirements in order for clients to become eligible for loan application. The first one is you need to have an established and registered business that has been in operation for at least a year. Your business should also have a yearly income of at least $50,000, but they will consider those that have earned at least $4,500 per month in the last three months of operation prior to the loan application.

Kabbage Business Loan Review

What are the chances of getting approved?

The reason Kabbage has been very compelling for small businesses is that owners with bad credit scores can still be approved a loan package. Still, the probability of approval and the rates of the monthly fees are dependent heavily on your current financial situation. But if you meet most of the eligibility requirements mentioned above then you have a high chance of approval.

Pros and Cons of Kabbage


Speed and convenience

Knowing whether your loan application has been approved in mere minutes is certainly a boon for business owners who are constantly looking for funding options. And once approved, you can already use the funds the same day, making it available to be used in your business. This is advantageous for small businesses who really need to get funding fast to satisfy demand, make modest expansions, or increase its number of personnel.

This degree of convenience becomes even more compelling when compared to traditional funding vehicles such as banks and lending companies, which typically take anywhere from a few weeks to a couple of months to process loan applications that, in the end, can actually be declined just the same.

You can also do all your transactions either through their website or their mobile app, which adds another level of speed and convenience for clients because you can access your account details practically at any time and anywhere you might be.

No upfront fees

Kabbage will not charge you any amount until you start using your approved loan or business line of credit. There are no processing or application fees, unlike some banks and credit companies which usually charge fees upfront that cannot be refunded even if the application gets rejected.

Reliability and trustworthiness

Kabbage is a well-known brand and company in the industry, and is generally known for its reliability. You would not need to worry whether you will receive the funds once your loan application is approved. In fact, back in 2015, it was even named as one of Forbes’ 100 Most Promising Companies, coming in at number 63 on the list. This reinforces the company’s reputation and gives clients confidence in using their platform.

Their loan computations and loan terms also offer a transparent payment scheme. The fees are laid out clearly, so you can budget accordingly without fear of surprise costs or hidden charges. They also offer a business loan calculator in their website so you can see the different fee ranges at different loan amounts.

Unsecured loans

Kabbage offers unsecured loans together with their secured loans options, which is a big advantage to new business owners who do not have the property yet to declare as collateral. This allows them to acquire the necessary items necessary to grow their businesses, which can be used later on as collateral for bigger loan amounts.

Bad credit scores do not make clients ineligible

Those who have bad credit scores can still avail a Kabbage credit line provided that their current financial situation is deemed good by Kabbage. This provides entrepreneurs who may just have hit a rough patch in the past to continue to grow their business and recover their financial losses, unlike banks and other institutions that immediately close their doors to those who have bad credit scores.

Good customer service

Lending services typically do not have good review scores, as many borrowers complain of poor customer service. Kabbage, fortunately, is among the outliers, having earned an A+ rating at Better Business Bureau (BBB) and a 9.2 rating on Trustpilot (based on over 2,000 reviews) which is no easy feat, especially for a lending company.


High rates

While it is indeed easy and convenient to avail a loan package from Kabbage, the trade-off is their relatively high rates of fees. Kabbage advertises that their monthly fees range from 1% to 10%. But when computed under more traditional terms, these figures equate to 24% to 99% annual percentage rates, which are really on the high side when comparing it against traditional business loans.

Also, the way the fees are structured means that you have to pay a higher amount in the first few months. If your business is the kind that takes time to pick up sales, the higher monthly payments can be a significant blow to your cash flow. So it is imperative to have a very detailed financial computation that includes the high fees of Kabbage. There’s also no incentive to pay off the entire loan amount early, as most of the additional fees would have been paid after the first few months.

Short terms

Short loan terms can be an advantage to some who want to pay early, but most business owners want a longer term so they could have the time to really improve their business and wait for their sales to pick up. This can also be disadvantageous should there be unforeseen events (accidents, medical issues) that occur, because you will always have to allot a significant amount of your income for the high monthly payments.

Not practical for large loans

Because of the aforementioned high rates and short terms, loan packages offered by Kabbage can be impractical for large loans intended for costly purchases such as machinery, properties, and others. Traditional loan options such as banks can be more ideal in these situations because while they may indeed be difficult to obtain and a hassle to facilitate, they still offer significantly lower fee rates for longer term agreements, which can be typically stretched into several years.

Final thoughts

In the end, Kabbage offers very compelling loan options coupled with a highly-convenient, fast, and ultra-modern process. It gives small business owners and entrepreneurs a fast and easy way to avail funds that would have been otherwise inaccessible. All these advantages do come at a cost though, and the costs are indeed high. The viability of Kabbage as your go-to funding company will depend on the needs and current financial situation of your company. Do you need fast cash to meet increasing demand and maintain growth of your company? Then Kabbage is certainly a viable option. But if you are planning for a more ambitious and more expensive expansion, then Kabbage’s high rates and short terms may have the possibility to impede your cash flow and leave you in a worse financial situation than you began with in the long run.

As with other services and products, make sure to gather enough information about Kabbage before availing their services. Inquire about the specifics of their loan packages and do not be afraid to ask questions. It will also be helpful to know more about similar services from other companies, so you can compare their pros and cons and make a more informed and accurate decision for your business.


General Kabbage Business Loan Questions

In this section, you will find answers to general Kabbage Business loan questions.

How does Kabbage work?
Unlike a traditional loan from a bank, Kabbage gives its users a line of credit that they can borrow against. It is primarily for users who don’t need a large loan amount upfront.
Where is Kabbage located?
Kabbage Incorporates is an online financial company that is based in Atlanta Georgia. While they are based in Atlanta, they operate primarily online via its business website. It has been in business since February 2009.
What is Kabbage funding?
Kabbage funding is a line of credit that allows small businesses to apply for in order to grow their business operations. It allows business owners to transfer funds they qualify for straight into their business bank account.
How to delete Kabbage account?
In order to delete a Kabbage account, you will have to ensure that your line of credit is completely paid. Then you can delete your account straight from the Kabbage dashboard or call directly to have a representative to close an account for you.
When will Kabbage give me an increase?
Kabbage will give you an increase on your loan amount after you have paid your loan completely and on time. It will also consider any growth in business revenue to increase your line of credit.
How to block Kabbage?
In order to block Kabbage, you will have to contact your bank directly to put a halt on any payments going to Kabbage. If paying through PayPal, you can disable preapproved payments via your PayPal dashboard.
For the IRS, how to report business fees for advance receivable for Kabbage loan?
In order to report business fees for advance receivable for a Kabbage loan to the IRS, you will have to include the loan amount and any business expenses paid by the loan on your IRS tax form.
How will Kabbage get my assets?
This depends if you applied for a secured loan or not. If your secured loan through Kabbage has been default for more than 90 days, they can take whatever you have used as collateral to pay for the loan.
How long is the response time for Kabbage?

The average response time for Kabbage is less than 24 hours. If you apply for a business line of credit from Kabbage, you can get approved or denied in as little as 10 minutes. Compare more fast business loans unsecured options.

How to disconnect my bank from Kabbage?
In order to disconnect your bank from Kabbage, you will have to contact your bank directly and force stop any payments going to cabbage. You can do this via your online dashboard with your bank or by talking to a bank representative.
How is Kabbage structured?
Kabbage is structured to be more flexible than a traditional bank installment loan. It is structured in a way to dip into the loan amount as frequently as needed while being able to pay it back quickly if desired.
How is Kabbage different from FTrans?
Kabbage is different from FTrans because unlike FTrans, Kabbage is a business loan provider. FTrans may offer a similar service, but the amount granted is dependent on credit score and revenue of the business. Kabbage only focuses on how much your business has made in order to qualify you for a loan.
What is Kabbage ACH Remittance?
Kabbage ACH Remittance is the use of electronic payment which can help improve efficiency, accelerate the flow of cash and reduce the number of trips you have to take to the bank to withdraw money for payments on your loan.
How do you find out your Kabbage monthly fee?
In order to find out your Kabbage monthly fee, you will have to consider the business loan amount and repayment terms. Once approved, you will be able to see your monthly fee in the business loan agreement.
How to put Kabbage into QuickBooks online?
In order to put Kabbage into QuickBooks online, you will want to set up a line of credit account in your QuickBooks dashboard. Then you will have to deposit a line of credit extended to your company followed by recording interest charges on your line of credit. From here, you will be able to pay bills directly from this line of credit if needed.
Who is Kabbage partnered with?
Kabbage is currently partnered with ING and ScotiaBank. These partners help to provide small business owners with the financial solutions they need for their business to succeed and to thrive.
Why is Kabbage a billion-dollar company?
Kabbage is considered a billion-dollar company due to the revenue it generates from the fees it adds to its business loans. Its direct lending business model has allowed the company to turn profitable since its fourth quarter in 2016.
What does Kabbage do with my bank account?
Kabbage uses your bank account to deposited awarded business loan funds into the account as well as to retrieve monthly payments and fees from the account. It will do this until the loan is paid in full.
How to close a Kabbage line of credit?

In order to close a Kabbage line of credit, the loan will have to be paid completely in full. Once paid, you can close your Kabbage account directly in the Kabbage dashboard or call a representative to close the account. Remember you can also consider the best small business credit cards as a funding option.

What credit agency does Kabbage use?
The credit agency that Kabbage uses are the main three credit agencies: Equifax, Experian and TransUnion. Upon payment or completion of the loan, Kabbage will report to these credit agencies.

Kabbage Business Loan Qualifications

In this frequently asked question section, you will find questions pertaining to Kabbage business loan qualifications.

What credit score is needed for a Kabbage loan?

In order to qualify for a Kabbage business loan, you will have to have a personal credit score of 500 or more. You will also have to have a minimum business revenue of $50,000. If you have a low credit score then you may want to look at other small business loans bad credit options.

How many days does it take Kabbage loan to decide for approval?

Kabbage typically takes as little as 10 minutes in order to decide approval for a business loan. However, upon approval, it can take as much as 1 to 3 business days for the approved loan amount to be deposited into your bank account. Consider looking into small business grants while you wait.

Who does Kabbage deny credit to?
Kabbage may deny a business line of credit to people who have less than 500 for a personal credit score or if their business revenue is less than $50,000 a year.
What I need to know about Kabbage line of credit?
What you need to know about a Kabbage line of credit is that your business must meet certain qualifications in order to be approved for a business loan. Payments for your loan will also be taken out of your bank account directly. Upon not paying the loan, the default will be reported to all three credit agencies.
How hard is it to qualify for a Kabbage loan?

It isn’t hard to qualify for a Kabbage business loan. As long as your business has an annual revenue of $50,000 and you have a personal credit score above 500, you can get approved for a business loan through Kabbage. Ask about minority startup business loans too.

How much do you need to qualify for a Kabbage loan?
In order to qualify for a Kabbage business loan, you will need to have a minimum of $50,000 to $100,000 in business revenue every year. If you apply for a secured loan, you will also have to have collateral that can be taken upon defaulting on the loan. This amount must equal to as much as the loan.
How difficult is it to qualify for a Kabbage credit line?
It isn’t difficult to qualify for a Kabbage credit line, as long as you have a credit score above 500 and your business has made between $50,000 to $100,000 in revenue for the year.
How to get a higher limit for a Kabbage loan?
In order to get a higher limit for a Kabbage loan, your business will have to increase its revenue every year and you will need to pay off any existing Kabbage loan on-time and completely.

Kabbage Business Loan Payment

In this section, you will find answers to questions pertaining to Kabbage business loan payments.

What happens if you default on Kabbage loan?
If you default on your Kabbage business loan, you will have to pay any of the existing loan amount as if you were your business. Most of the time, your default loan will be sent to collections for repayment.
How long does it take for Kabbage to start collection?
Kabbage can take as long as the first 180 days in order to collect the debt for you and your business themselves. After 180 days, they will write off the debt to a collection agency.
How to negotiate longer payment terms with Kabbage?
In order to negotiate a longer payment term with Kabbage, you will have to do so at the start of your loan when you apply for the line of credit. If you did not request a longer payment term, you will have to make payments as per your Kabbage contract.
How much does Kabbage pay to affiliates?
Kabbage offers an affiliate program which pays its affiliates up to $150 per every qualified customer or business that applies for a business loan. Affiliate payment is sent after a customer gets approved for a business loan.
What happens if you don’t or can’t pay a Kabbage loan?
If you can’t or don’t pay your Kabbage loan, Kabbage will begin to call to collect on the loan within 180 days due to defaulting on it. After 180 days, the amount you owe to Kabbage will be sent to a collection agency.
How long does it take for Kabbage to send money to my bank?
Once you get approved for a Kabbage business loan, it can take up to 3 business days for approved loans to be sent to your bank account. This can take up to 5 days depending on the amount of the business loan.
How to cancel Kabbage preapprovement in PayPal?
In order to cancel a Kabbage preapproved payment in PayPal, you will need to do so through the PayPal dashboard. You can do so under the Preapproved payments tab and find the payment for Kabbage. From there, click Cancel.
How to get a hold release with Kabbage?
In order to get a hold release with Kabbage, you will have to talk to either a Kabbage representative directly with the request or go to your bank and request a hold release on funds transfer from Kabbage.
How do I update Kabbage payment plan on PayPal?
Unfortunately, you cannot update any payment plan set up with Kabbage on PayPal. Upon approval, you will set up an approved payment plan through Kabbage and will be unable to change it without changing your contract.
How much does Kabbage give based on revenue?
Kabbage will give up to a $250,000 credit line based upon the revenue of your business. Kabbage requires businesses to make as much as $100,000 a year in order to qualify for a line of credit.
Where does Kabbage source its funds?
Kabbage sources its funds from private investors and banks partnered with the company. Some of its sources and investors include Reverence Capital partners, SoftBank Capital, UPS Strategic Enterprise Fund and ING.
How fast is the loan turnaround for Kabbage?
The loan turnaround for Kabbage will vary based on the amount of the line of credit. Typically, for a loan of $10,000, it can take as low as 3 to 6 months with higher monthly payments.
How to pay a Kabbage loan early?
To pay off a loan early with Kabbage, you will have to request it in the application process. Early payment can result in higher monthly payments and higher monthly fees.
What happens when my Kabbage loan is more than 160 days late?
When your Kabbage loan is more than 160 days later, Kabbage will make a conscious effort to collect the debt owed from you directly. After 180 days, Kabbage will transfer the debt to a collection agency to collect the debt.

Kabbage Business Loan Rates

In this frequently asked question section, you will find questions pertaining to Kabbage business loan rates.

What is Kabbage interest rate?
The average Kabbage interest rate for a business loan is around 5% to 10% interest rate. The interest rate is dependent on the amount of the business loan and your personal credit score.
How much interest does Kabbage charge?
Kabbage charges between 5% to 10% on their business loans depending on the amount of the line of credit and the person credit score of the personal applying for the loan.
What are the fees for Kabbage lending?
The fees that are associated with Kabbage lending are interested rates, APR and payment fees from your bank. This will depend on the amount of the loan and personal credit score.
What are the average monthly fees for a Kabbage loan?
The average monthly fees for a Kabbage loan can be around 10% of the monthly payment. If your monthly payment is $200 a month, an extra $50 to $75 can be for just monthly fees.
What is Kabbage’s lowest rate?
Kabbage’s lowest rate is 5% of certain loan amounts. However, even with this low interest rate, Kabbage will have a APR between 25% to 99% depending on personal credit score.
What APR percentage does Kabbage have?
The percentage of APR that Kabbage has can range between 24% to 99%. However, the average APR for business loan customers are 40%. This will be dependent on the loan amount.

Anne Miller

Anne is a Senior Author for SBL. She began her career as an independent consultant for local businesses after graduating with a BA in Management. Since that time, she’s expanded to writing as well as consulting to spread helpful knowledge to small business owners across the country.


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