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finder.com’s rating: 4.2 / 5.0
★★★★★
Bottom line: Kabbage lines of credit were a convenient option for small businesses that couldn’t access traditional financing from a bank. They’re currently unavailable, but keep an eye out for new products — American Express acquired the company in October 2020.
$500
Min. Amount
$250,000
Max. Amount
Product Name | Kabbage small business loans |
---|---|
Min. Amount | $500 |
Max. Amount | $250,000 |
Loan Term | 6 to 12 months |
Min. Credit Score | 600 |
APR | Varies |
Requirements | 1+ years in business, $100,000+ annual revenue or $4,200+ monthly revenue over last 3 months |
Review by
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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.
Because the coronavirus outbreak is hitting many businesses hard, Kabbage has temporarily shifted its focus toward merchant services like Kabbage Payments. Its usual short-term line of credit option is not currently available. But you can sign up for a waiting list to be notified when it comes back.
Kabbage was acquired by American Express in October 2020, so future loan products might be available through Amex, rather than Kabbage.
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.
Kabbage offers short-term loans between $500 and $250,000 to businesses 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.
Kabbage lines of credit aren't available now. Compare these lenders instead.
To be eligible for a line of credit with Kabbage, your business must meet two basic requirements:
BBB accredited | Yes |
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BBB rating | A+ |
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 complaints are from customers who are unhappy with how the company responded 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 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.
When applications are available, you can apply by filling out a form online or through Kabbage's mobile app. Kabbage requires you to connect your business checking account or PayPal account when you apply. You can also connect any other accounts your business uses, including the following:
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.
When you're ready to borrow, you can access your Kabbage line of credit one of three ways:
Kabbage is a pioneer of online business lending that relies on alternative data, rather than your traditional time in business, revenue and credit score requirements. Alternative data makes it easier for small business owners who can't qualify for a bank loan to access funding at an affordable rate.
But Kabbage lines of credit aren't cheap. Its complicated deal structure makes it difficult to compare to other products. But generally, it's more expensive than many longer-term business loans and lines of credit.
Kabbage is a legitimate online business lender that is owned by American Express. American Express is registered as a bank and has FDIC insurance on its accounts. This means it has to meet more rigorous standards than your typical online lender.
Kabbage not for your business? You can compare more business loans, including short-term lenders like Kabbage.
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.