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Kabbage Review

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Date Established
2009
Location
Atlanta, GA

Pros

  • Suited for small businesses
  • Relaxed borrower qualifications
  • No additional fees
  • Fast application process

Cons

  • Unsuited for startups
  • Potentially high APRs

Overview

Founded in 2009, Kabbage is a lender that offers lines of credit to eligible businesses.

Finding a lender more convenient than Kabbage would be difficult. In most cases, business owners can apply, get a decision on their rates and fees, and start drawing funds within a few minutes. That’s really fast, even for an industry that’s known for coming to quick lending decisions.

The speed comes at a price, though. With fees that can reach up to 10% of your borrowing amount each month, this lender provides some of the more expensive loans you’re going to come across. And while they don’t have a prepayment penalty, some merchants don’t like that Kabbage’s loans are front-loaded, which means you might not be able to save very much money by repaying early.

Despite the potentially high cost, there’s a lot to like about Kabbage. The application is fast and easy, repayments are made monthly (as opposed to daily or weekly), and the line of credit-style loan offers an easy-to-access financial safety net. In fact, Kabbage’s line of credit is the easiest to access on the market — in addition to being able to request funds via desktop or mobile app, Kabbage offers a spending card so you can pay for the exact amount right from your credit line.

Is this the right loan for your business? Read on for the details!

Services Offered

Kabbage offers business lines of credit.

Borrower Qualifications

To qualify for a loan from Kabbage, here’s what you’ll need:

RequirementMinimum requirement
Time In Business:12 months
Personal Credit Score:N/A
Revenue:$50,000 per year (or at least $4,200 for the last 3 months)

Kabbage does not have a specific credit score requirement. However, this lender does look at your credit during the application process.

Terms & Fees

These are the terms and fees stated on Kabbage’s website:

RequirementMinimum requirement
Borrowing Amount:Up to $250,000
Draw Term Length:6 or 12 months
Borrowing Fee:1.5% - 10% of the borrowing amount per month
Draw Fee:None
Effective APR:24% - 99%
Learn more

Kabbage loans have a term length of either six or 12 months. Each month you repay 1/6th or 1/12th of the principal plus a fee.

This lender does not enforce a prepayment penalty, but keep in mind that Kabbage operates on a front loaded fee structure. For the first two months of a six-month loan, and the first six months of a 12-month loan, your fee will be somewhere between 1.5% and 10% of the original principal per month. For the remaining months, your fee will be 1% of the principal. Confused? Kabbage has a very nice loan calculator on their website, which may be helpful for understanding how the fees work.

Be aware that, due to the way the fees are issued, Kabbage loans do not technically carry an APR. However, estimated APRs range from about 24% to 99%.

Other than the monthly borrowing fee, Kabbage does not charge additional fees. For example, you will not be charged draw fees, maintenance or servicing fees, unused line fees, or a prepayment penalty.

Before you get your loan, Kabbage will send you a SMART Box that will disclose everything you need to know to make an informed borrowing decision, including the total loan fee and the effective APR.

Application Process

The application process is completed online. Kabbage will ask for information about you and your business. You will also have to give the lender read-only access to your business bank account and any other data channels you use (such as Amazon, PayPal, and QuickBooks). Kabbage uses the information provided to determine your monthly fee and maximum credit line.

Kabbage will perform a hard pull on your credit during the application stage. Although the lender does not state a minimum cutoff, they will use your credit history to help verify identity and determine risk.

Your rates and fees are decided by an algorithm. In general, it only takes a few minutes for the system to decide whether to approve or deny your application. However, if Kabbage has trouble verifying information, the process might take longer. Additionally, Kabbage might request additional information in order to grant you a larger credit line.

When you have been approved, you can begin requesting funds. You can also request a Kabbage Card free of charge to pay for goods and services right from your credit line.

Sales & Advertising Transparency

Kabbage fully discloses all numbers, fees, application procedures, and terms of service on their website. I’m particularly fond of their help center, which answers common questions, and the loan calculator, which can help you understand Kabbage’s unusual fee structure. There is also an ROI calculator to help you know whether the cost of the loan is worthwhile in the long run.

Before borrowing, Kabbage provides your loan details in a SMART Box, a standardized method of disclosing financial information so borrowers can easily compare offers. This box includes the total cost of capital, the APR, the average monthly payment, and the cents-on-the-dollar cost for easy comparison.

Customer Service & Technical Support

If you can’t find the answers to your questions in Kabbage’s help center, Kabbage is available via phone or email. The lender also has a fairly active presence on social media sites including Twitter and Facebook.

Negative Reviews & Complaints

Kabbage has an A+ rating with the Better Business Bureau, with eight negative reviews and 51 complaints in the last three years. They also have a presence on Sitejabber and TrustPilot.

Here are the most common complaints regarding Kabbage’s service:

  • Rejections: Unfortunately, Kabbage cannot extend credit lines to all applicants. Even if you meet the company’s minimum stated requirements, you might not be eligible based on other information they find during the application process.
  • Expensive fees: With fees that have an equivalent APR between 24% and 99%, Kabbage loans can be expensive. If you are worried about cost, I’d recommend shopping around a bit before settling on a line of credit. Check out our list of the best business lines of credit for 2018 to see some other options you might be eligible for.
  • Front loaded fees: Kabbage has received criticism because the bulk of their fees have to be paid in the early part of the repayment term. Although they technically don’t have a prepayment penalty, the front-loaded fees can make it difficult to save a significant amount of money by repaying early.
  • Sudden loan limit cut: Kabbage keeps an eye on your cash flow, so if business is starting to go sour, they might reduce your borrowing limit or cut off your credit line entirely. If this happens, you’ll still have to repay any outstanding debt you still have.

Positive Reviews & Testimonials

Kabbage also has a very positive aggregated rating on TrustPilot and a few testimonials on their website. Overall, merchants are happiest with:

  • The speed and ease of application
  • Fast access to cash
  • The customer service

Aside from reiterating what the TrustPilot reviewers said, the merchants in the testimonials seem to like the financial safety net that’s provided by the line of credit style structure. Once you get into their system, Kabbage capital is always there if and when you need it.

Final Verdict

There are a lot of things to like about Kabbage. Many businesses will be eligible for their service, the application process is fast and painless, the capital is always there when you need it, and they don’t charge extra fees. In general, Kabbage is very transparent — you’ll know everything you need before borrowing money, and you shouldn’t come across any surprises.

However, Kabbage’s fees can get expensive. Before settling (on Kabbage or any other lender), I’d encourage you to shop around. Curious about what else is out there? Take a look at some of Kabbage’s competitors or a comparison of our favorite lines of credit.

 Draw On Your Credit Line With A Kabbage Card

Bianca Crouse

Bianca Crouse

Bianca Crouse has been writing about business loans and finance for three years. In addition to Merchant Maverick, she has appeared in Startup Nation and Business.com, among others. She has a BA in English from George Fox University and lives in the Pacific Northwest.
Bianca Crouse
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13 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    karen

    Organization Name: sweet lulu's bakery & cocktail caravan

    RUN don’t walk from these scammers. I changed my bank account last month. Did it online. Called them to confirm it was done and to remove info on the old account. They submitted an auto debit from the old account, changed me $100 for their error. This month for security reasons I had to open yet another new biz checking account. Had no problem updating info for electric bill, car payment, AMx, Venmo, etc – but these folks have an antiquated system that’s says “You have already added all accounts from Wells Fargo, please search for a different bank.” When I called and emailed repeatedly to resolve I was told for their system to update. It’s been weeks and again this month they pulled money from a closed account. They VEHEMENTLY refuse to refund this $200 back to my account and refuse to delete an old account. Again – a billion percent THEIR error.

    1
    • Organization Name: sweet lulu's bakery & cocktail caravan
    Penelope wakeland

    Terrible company. They’:ve already taken 3 payments out of my account this month!! and overdrawn my account after telling me they wouldn’t and I only owe them a small amount of money.

      Frank

      Organization Name: Na

      So one out 10 reviews says something good about this company, I would never do busyness with this lender thank you.

      • Organization Name: Na
      dave

      Organization Name: NUC Sports

      don’t ever use these guys, they withdraw fees from your account that are not part of your loan, but also when your account is closed you cant unlink your accounts. I had paid off everything and closed accounts and my account stayed linked and they say they have no way to unlink it. plus they keep your information on file even when you ask to remove it. all i want is my information not be up there for consumption by them. They had the gaul to tell me to just change the passwords to all my linked accounts…wow..garbage.

      • Organization Name: NUC Sports

      This comment refers to an earlier version of this review and may be outdated.

      Ron Reolfi

      Organization Name: IPG Global Marketing

      This is a very underhanded company. They used my personal credit information without my permission. The application process is easy, but customer service is terrible and they admitted that glitches cause connections to not work properly and they don’t know how to fix it.

      1
      • Organization Name: IPG Global Marketing

      This comment refers to an earlier version of this review and may be outdated.

      steven park

      This Kabbage Company is GARBBAGE,!!!!I applied for a working capital. Have good credit. other lenders willing to fund me 100000.00+My business revenue is over 700000.00 Garbbage is offering me 1000.00 and paid back is 1300.00I gave them Middle fingers!! I think they thought i need to buy toilet paper for my company.They did pull hard credit on my personal and business. Stay away from this Garbbage!.

      1

        This comment refers to an earlier version of this review and may be outdated.

        Jim T

        Horrible, high-fee predatory lender. Absolutely a terrible source of funds given their ridiculous rates. Don’t do it!

        1

          This comment refers to an earlier version of this review and may be outdated.

          Marsha Kelly

          Kabbage is a great place to get money for your business needs fast and if you don’t have great credit. They helped me cover a shortfall due to seasonal fluctuation. Yes, the rates are higher than traditional banks – but I could not get a standard business loan. The monies I borrowed from Kabbage helped me secure a big contract, generate company profit and jobs in my community. Like all things in life and business go in with your eyes wide open. I calculated the costs into my budget and it worked out really well for me. Thanks for a great review.

          4

            This comment refers to an earlier version of this review and may be outdated.

            hillary lando

            I loved kabbage got the money paid my monthly payments paid off early went perfectly everything great.However they will sell your info to other lending institutions and you will still be getting calls from about 50 lenders for 2-3 years are slowing down now slowly. its horrible

            3

              This comment refers to an earlier version of this review and may be outdated.

              Sami

              ****SCAM ALERT ***Stay away kabbage is so unprofessional and dishonest. I met all the qualifications to get a loan but they said I didn’t meet all of the 300 points that there system puts business applicants through. After reading the reviews I’m glad I didn’t do business with them.

              1

                This comment refers to an earlier version of this review and may be outdated.

                Andrew Draper

                They make it look like a small businesses answer to lending but they’re actually a very aggressive scheme. Screw them! Don’t do it! They aren’t saviors helping you get out of rut.

                You’ll quickly find yourself deeper than you were in the first place. The trouble is that they will happily give you money but they want it back right away.

                Take a thousand dollar loan and guess what, a couple of weeks later it’s due.

                This would work if they stretched it out over a couple months.

                Please don’t be tempted by this. The high APR’s are enough. It’s pretty much a one-way scam. They’re not interested in your well-being AT ALL!

                So bummed! Why not just stretch the advances out a bit? Evil shit.
                They’ll call and email you daily if you’re late… Great that’s what I need when business is slow.

                ~Andrew

                andrew@nectarspaces.com

                  This comment refers to an earlier version of this review and may be outdated.

                  Brent Mansingh

                  long story short, you will never receive a single promotional gift card they promise! I borrowed roughly 22,800 from kabbage with incentivized funds totaling a whopping $350. I have payed back my ENTIRE loan balance in full, and would you believe I have not received a single card? I’ve complained and spoken to everyone within customer support. The live channel on their website just closes my window whenever speaking to me. Its quite ridiculous and ultimately a scam. Their are laws out there preventing such things, but thats not going to stop KABBAGE from making their money. I forwarded all emails to their “support@kabbage” and these slime balls have yet to reply! This was back in September of 2015. Please be advised. I am a father who was hoping to buy Christmas Presents for my children. Luckily this was just a means to add to what I was able to provide for them, but this was saddening to me nonetheless. I AM PUTTING THIS HERE FOR YOU! I’m not some crazy person that just leaves off the wall reviews. But when you deceive others and hurt families, you define what it means to be gutless… hurting the American Dream. If for no other reason, for ethics

                  1

                    This comment refers to an earlier version of this review and may be outdated.

                    Lisa S

                    So disappointed. Took out a $3800 loan, found out three weeks later our first payment due was $690. Terrible terms, will not do business with in the future.

                    1

                      This comment refers to an earlier version of this review and may be outdated.

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