Kabbage business loans review
Apply for a line of credit up to $250,000 and take your small business to the next level.
finder.com’s rating: 4.2 / 5.0
- Best for quick short-term financing whenever your business needs it.
- Pick something else if you want to avoid a complex fee schedule.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over six years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at the IT Journalism Awards. Elizabeth's passion is writing about innovations in financial services (which has surprised her more than anyone else).
Kabbage is a good choice for businesses that need frequent access to small loans. Because each draw is treated as a separate loan, your business can borrow as much or as little as it needs without having to reapply each time.
But the fee schedule is complex. And Kabbage has mixed reviews when it comes to its customer service — especially concerning complaints about the high fees that come with each short-term business loan.
To see what fits your business best, compare more business loan options.
Business funding from Kabbage during the coronavirus
Because the coronavirus outbreak is hitting many businesses hard, Kabbage has temporarily shifted its focus toward two new programs: Funding Paycheck Protection Program loans and Kabbage Payments.
Its usual short-term line of credit option is not currently available.
How much will a Kabbage line of credit cost me?
Kabbage doesn't charge interest, but you will be assessed a fee based on the amount you borrow and your loan term.
Every month you'll make a payment toward the principal along with a fee of 1.5% to 10% of your loan amount. The fee drops to just 1.5% after the first two months of a six-month loan or the first six months of a one-year loan.
How does a Kabbage line of credit work?
Kabbage offers short-term loans between $250,000 and $250,000 to businesses in across the US. You can withdraw your funds through the Kabbage App, Kabbage Card and its website — and you'll only pay fees on what you borrow.
Since you'll be borrowing a line of credit and not a term loan, you can choose how much to borrow — up to your approved credit limit. But while you will have access to a line of credit, each draw is treated as a separate loan. This means repayment terms and interest may be different each time you make a draw.
What do I need to qualify?
To be eligible for a line of credit with Kabbage, your business must meet two basic requirements:
- At least one year in business
- Annual revenue of $50,000 or monthly revenue of $4,200 for the past three months
What information do I need to apply?
Kabbage requires you to connect your business checking account or PayPal account when you apply. You should also connect any other accounts your business uses, including:
You will also be required to provide your Social Security number and business tax ID number.
What industries does Kababge work with?
Kabbage works with most business, but it doesn't provide lines of credit to nonprofits, financial institutions or businesses in the following industries:
What other types of financing does Kabbage offer?
Kabbage has two funding options for businesses struggling during the coronavirus.
Paycheck Protection Program
Kabbage has partnered with SBA lenders to offer loans on their behalf. This means it will act as the middleman between lenders and borrowers. You’ll apply through Kabbage’s portal, but you’ll be responsible for paying back your lender — not Kabbage — if you’re approved for funding.
Funds are available on a first-come, first-served basis, so you should read more about the Paycheck Protection Program and ensure your business qualifies before you apply.
Kabbage allows you to accept card payments, send professional invoices and sell online gift certificates to support your business’s short-term needs. Funds are deposited directly into your business bank account within one to two business days, and fees for card transactions are capped at 2.25% until July 2020. There are no monthly fees.
There are two repayment options. Your business can repay your loan within three to 45 days through Payments revenue, or you can choose to make monthly repayments — Kabbage accepts 6-, 12- and 18-month terms.
Pros and cons
- Low annual and monthly revenue requirement
- Link multiple accounts
- Draws deposited within three business days
- Monthly fee as low as 1.5% of loan amount $500
- Short repayment terms of six months or one year
- Unique but complicated fee structure
- Prepayment won’t save much on interest
- Small maximum amount of $250,000
See other top business loan options
Is Kabbage legit?
Yes, Kabbage is a legit online business lender that is a member of several organizations dedicated to safe lending practices, including the Innovative Lending Platform Association. Its loans are backed by Celtic Bank, and its website is encrypted to help safeguard your information.
Kabbage was also recognized at the 2018 Lend360 conference for its noteworthy innovation in helping borrowers get easy access to funds at time of purchase.
Kabbage reviews and complaints
|BBB customer reviews||3.6 out of 5 stars, based on 484 customer reviews|
|BBB customer complaints||1,364 customer complaints|
|Trustpilot Score||4.2 out of 5 stars, based on 6,618 customer reviews|
|Customer reviews verified as of||13 October 2020|
Several customers report they are happy with how easy it was to apply and manage their accounts. Others highlighted its customer service team as friendly and professional.
Go into other forums, however, and you'll get a different picture. People with eBay stores in particular report thinking Kabbage's fees are too high and terms too short. Complaints around how Kabbage handles late payments are also fairly common.
Some borrowers are also upset with how Kabbage responds to disasters. Two borrowers state their credit limit was reduced to $1,000 after being hit by Hurricane Irma. And as of October 2020 there are mixed reviews on how Kabbage is handling the coronavirus outbreak. Some borrowers say they were able to get extra funds for their business right away, while others had their accounts frozen or had payments taken out after requesting a temporary hold.
How do I apply?
When you're ready to apply, click the Go to site button on this page to start an application.
- Create an account with Kabbage and enter your business's name, address and phone number.
- Select your business's industry and the structure of your company, then enter the establishment date and annual revenue. Click Continue.
- Enter information about yourself, including your Social Security number and date of birth. If you would like a Kabbage Card, select the option. Click Continue.
- Connect your bank account and other business accounts by logging in through Kabbage's secure interface.
What happens after I apply?
After you submit your application, you should be informed of your approval status within a few minutes. If you're approved, you'll have access to your line as soon as the next business day and will be able to make draws whenever your business needs.
How do I get the Kabbage Card?
If you didn't request a Kabbage Card during the application process, follow these steps:
- Visit the Kabbage website and log into your account.
- Click the button to request a card.
- Wait for the card to arrive, usually seven to 10 days.
- Once the card arrives, log into your account and agree to the cardholder terms.
- Activate the card and set a secure pin.
After you've activated your Kabbage Card, you can use it whenever you need to make a withdrawal from your line of credit.
More about the Kabbage Card
Kabbage created its Kabbage Card to give you access to your line of credit whenever and wherever Visa is accepted. Because it isn't a credit card, there are no extra fees to withdraw from your line of credit.
Every time you use it, you create a new six-month loan with the same terms as your other loans. It won't impact your credit, and there is no minimum purchase or limit to the amount of items you can purchase. However, you are limited to how much you can spend — up to $25,000 per day, $50,000 per month and $60,000 per year.
The Kabbage Card allows you to use your line of credit instantly. There's no waiting period to transfer funds, and you'll even be able to withdraw cash without any additional fees. You can use it online or in-store to pay for nearly any expense your business needs.
How do I withdraw my funds?
When you're ready to borrow, you can access your Kabbage line of credit one of three ways:
- Kabbage Card. Your Kabbage Card can be used anywhere Visa is accepted to make a purchase.
- Dashboard. Every 24 hours, you can use the Kabbage dashboard to draw funds and have them deposited directly to your checking or PayPal account.
- Kabbage App. Kabbage has an app you can use on iOS or Android to quickly draw from your line of credit and access your funds.
How do repayments work with Kabbage?
Loan repayments are automatically withdrawn one to three business days after you initiate payment, and there is a four-day grace period before you're charged a fixed fee based on your draw. Kabbage’s fee schedule is complex, so don’t hesitate to reach out to Kabbage customer service if you have any questions about your account.
Frequently asked questions
Business loan ratings
We rate business loan providers on a scale of 1 to 5 stars based on factors like transparency, costs and customer experience. We don't take into account elements like eligibility criteria, state availability or payment frequency — we save that for our reviews.
Read the full methodology of how we rate business loan providers to get a better picture of what goes into each star rating.
Kabbage is best for…
- Quick cash. Qualifying only takes a few minutes and you'll have easy access to cash as long as your credit line is open.
- Fair credit borrowers. Kabbage's nontraditional approach puts less weight on your credit score than other lenders.
- Short term. Although this can mean high repayments, it also means that you'll be done with your loan that much sooner.