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Kabbage business loans review

Kabbage Funding has relaunched its working capital lines of credit with Amex.

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Updated Jan 21, 2023. What changed?

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Our verdict

Kabbage from American Express offers a business line of credit for small businesses. It features a quick, doc-free application if you can link your business accounts. Each draw on your Kabbage Funding line of credit becomes a short-term installment loan. Instead of interest, these loans come with a flat monthly fee. While the cost decreased after American Express bought the online lender in 2020, Kabbage Funding has seen an uptick in negative reviews and fewer businesses can qualify. Its original servicer, K-Servicing, also filed for bankruptcy in October 2022 — though the bankruptcy doesn't affect new customers.

Best for: Fair credit borrowers in need of a low-fee business line of credit.

Pros

Lower fees than most competitors
Only take out what you need when you need it
No prepayment penalties or interest charges

Cons

Monthly fee depends on draw amount
Reviews cite poor customer service
Previous servicer filed for bankruptcy

4.4

★★★★★

Finder rating

Min. Amount

$2,000

Max. Amount

$250,000

APR

N/A

Kabbage rates and fees

Each time you withdraw from a Kabbage line of credit, that withdrawal becomes a short-term loan. But instead of an interest rate, Kabbage charges a flat monthly fee. Unlike other providers, you must withdraw at least $500 every time — or more if you want more time to pay it back.

The new flat monthly fee is simpler than Kabbage’s previous fee structure, which charged a higher fee at the beginning of the repayment term. In fact, the new Kabbage Funding now costs less than similar lenders like OnDeck and BlueVine.

Here’s how the monthly fees and minimum loan amounts break down by repayment term:

Repayment term	Minimum draw	Monthly fee	Total monthly fees over loan term
6 month	$500	0.25% to 3.50%	2.0% to 9.0%
12 month	$10,000	0.25% to 2.75%	4.5% to 18.0%
18 month	$20,000	0.25% to 2.50%	6.75% to 27.0%

Online business lenders typically charge interest rates that range from 7% to 100%, according to research by business loan marketplace Nav, which makes Kabbage a lower-cost option.

Take out more than one loan at a time, as long as you stay within the total amount of your established credit line. But if you take out a second or third loan, your monthly payments will increase.

Kabbage customer reviews and complaints

BBB accredited	No
BBB rating	F
BBB customer reviews	2.63 out of 5 stars, based on 444 customer reviews
BBB customer complaints	2,393 customer complaints
Trustpilot Score	2.8 out of 5 stars, based on 6,776 customer reviews
Customer reviews verified as of	19 January 2023

Kabbage reviews and ratings continue on a downward trend since Amex acquired the company. Many reviews are complaints about how difficult it is to reach customer service at K-Servicing. However, American Express, which issues Kabbage loans, fares much better — perhaps because the bank is held to a higher standard.

Other lenders may offer more support or fund your loan more quickly.

Kabbage acquisition and trouble with PPP loans

K-Servicing was the company that was responsible for issuing Kabbage loans, and it filed for Chapter 11 bankruptcy in October 2022 before Kabbage was acquired by Amex. Kabbage is facing several government inquiries into its handling of PPP loans.

The BBB issued a Pattern of Complaint on K-Servicing, stating that multiple customers complained on how the PPP loan forgiveness applications were not being processed on time — and these applications were time-sensitive. While K-Servicing was acknowledging the complaints, more complaints were filed, citing the same issues. The BBB states, “The company provided BBB with steps they implemented to address it; however, the pattern continues.”

On the plus side, these issues are no longer associated with Kabbage. Kabbage started as a financial technology company and didn’t face the same scrutiny as banks. However, now that American Express owns Kabbage Funding, the company is required to be compliant with federal banking regulations.

Kabbage eligibility requirements

There are several eligibility requirements that your business must meet to qualify for Kabbage Funding:

18 years old
At least one year in business
640 minimum credit score
Valid business checking account
$3,000 minimum monthly revenue

Kabbage runs a credit check on your business and personal credit scores, and your average monthly revenue, transaction volume, credit card sales and other metrics will affect the credit limit you qualify for.

The 12-month time in business requirement means that you can’t use Kabbage to start a business. But you can use a Kabbage loan while your small business is still in the startup phase — when your business is too new to qualify for a loan from a traditional financial institution.

How the application works

Kabbage has a fully digital application, which you can access either online or through the Kabbage app. The application process involves connecting to your business bank account and other business software like Quickbooks and PayPal.

Kabbage uses that data to analyze your business’s performance and runs a soft credit check to come up with a loan offer. While Kabbage doesn’t advertise how long approval takes, Kabbage reviews on sites like the BBB and Trustpilot say it can take around three days.

If you accept the offer and agree to a hard credit check, Kabbage sends the funds to your bank account. This can take anywhere from one to three business days.

Is Kabbage legit?

Yes, Kabbage is a legitimate lender. American Express owns Kabbage, and its business lines of credit are issued by American Express National Bank.

But before the Amex acquisition, Kabbage had already established itself as a leading online business lender. It served over half a million small businesses and funded over $16 billion in loans.

During COVID-19, Kabbage was the first financial technology company — or fintech — to get SBA approval to offer PPP loans. And thanks to its automated underwriting process, it became one of the largest PPP lenders by volume, funding over 300,000 loans.

However, it was found that many of these PPP loans were fraudulent. After facing several inquiries, K-Servicing filed for bankruptcy shortly after Amex acquired Kabbage.

Low fees set Kabbage Funding apart

Kabbage fees are low compared to other online lenders. In fact, the starting fees are even low compared to some banks. This makes Kabbage one of the more affordable options available to small business owners who struggle to qualify for a bank loan.

But it’s slower than other options. For example, OnDeck offers same-day approval and an instant turnaround. Other providers also tend to get better customer reviews.

If cost isn’t your top priority, then another lender could be a better choice.

Kabbage is best for…

Low fees. This lender’s monthly fee structure charges far less in fees than what you’d pay in interest for most traditional installment loans.
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.

Alternatives to Kabbage Funding

Kabbage Funding’s slow turnaround time and less-than-stellar customer reviews might have you considering other options. Use our table to compare rates, requirements and loan amounts for these alternatives to Kabbage.

Or, read our guide to small business financing to learn about more traditional and nontraditional options.

1 - 6 of 6

Name	Min. Amount	Max. Amount	APR	Requirements
$3M+ funded! Lendio business loans Finder Rating: 4.75 / 5: ★★★★★ Lendio business loans Finder Rating: 4.75 / 5: ★★★★★	$500	$5,000,000	Starting at 6%	Operate business in US or Canada, have a business bank account, 600 personal credit score	Submit one simple application to potentially get offers from a network of over 300 legit business lenders.	Go to site More Info	Compare	loading Fetching your data...
Big Think Capital Finder Rating: 4.7 / 5: ★★★★★ Big Think Capital Finder Rating: 4.7 / 5: ★★★★★	$10,000	$5,500,000	Starting from 6%	600+ credit score, 2 years in business, $100,000 annual revenue	Go to site	Compare	loading Fetching your data...
Nav business loans Finder Rating: 4.8 / 5: ★★★★★ Nav business loans Finder Rating: 4.8 / 5: ★★★★★	$500	$5,000,000	As low as 1%	550+ credit score	Get connected with personalized matches from over 100 lending options. Plus, get the best rates with the help of dedicated funding managers.	Go to site More Info	Compare	loading Fetching your data...
Fora Financial business loans Finder Rating: 4.1 / 5: ★★★★★ Fora Financial business loans Finder Rating: 4.1 / 5: ★★★★★	$5,000	$750,000	Varies	12+ months in business, $15,000+ gross monthly sales, no open bankruptcies	Get qualified for funding in minutes for up to $750,000 without affecting your credit score. Best for companies with at least six figures in annual revenue.	Go to site More Info	Compare	loading Fetching your data...
ROK Financial business loans Finder Rating: 4.7 / 5: ★★★★★ ROK Financial business loans Finder Rating: 4.7 / 5: ★★★★★	$10,000	$5,000,000	Starting at 6%	Eligibility criteria 1+ year in business, $15,000+ in monthly gross sales or $180,000+ in annual sales	Apply for up to $5 million with a 15-second online application. Choose your best offer and get funded as soon as the same day.	Go to site More Info	Compare	loading Fetching your data...
Upstart Finder Rating: 4.3 / 5: ★★★★★ Upstart Finder Rating: 4.3 / 5: ★★★★★	$5,000	$200,000	Varies	550 minimum credit score, 12+ months in business, Operate in any US state (including DC) except NV, NH, MD, WV, IA, be registered as an LLC, LLP, S-Corp, or C-Corp	Upstart features a quick, online application and accepts all credit scores. Its unique underwriting process considers alternative factors, such as education and work history.	Go to site More Info	Compare	loading Fetching your data...

Compare up to 4 providers

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Anna Serio

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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.

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