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Kabbage business loans review

Kabbage rereleases its lines of credit — but only Amex customers get access for now.

finder.com’s rating: 4.2 / 5.0

★★★★★

Bottom line: Kabbage lines of credit are a convenient option for small businesses that can’t access traditional financing from a bank. They’re currently only available to a businesses with an American Express credit card account. But it plans to serving a wider audience soon.

Details

Min. Amount$500
Max. Amount$250,000
Loan Term6 to 12 months
Min. Credit Score600
APRVaries
Requirements1+ years in business, $100,000+ annual revenue or $4,200+ monthly revenue over last 3 months

Pros

  • Low annual and monthly revenue requirement
  • Link multiple accounts
  • Draws deposited within three business days
  • Nonresidents can qualify with eligible visa

Cons

  • Line of credit currently unavailable
  • Short repayment terms of six months or one year
  • Complicated fee structure
  • Low maximum loan amount of $250,000

Limited availability on Kabbage lines of credit

Kabbage is slowly relaunching its lines of credit after shutting down regular lending operations to focus on the Paycheck Protection Program. Currently, Kabbage lines of credit are limited to business owners who meet the following criteria:

  • American Express business card open for at least two months
  • At least 12 months in business
  • Business checking account

Kabbage is rolling out to American Express first because the credit card company acquired Kabbage in October 2020. Lines should be available to more customers as the economy recovers from the COVID-19 pandemic.

Kabbage fees and terms

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 $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.

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How 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

Kabbage reviews and complaints

BBB accredited Yes
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.

Kabbage disaster responses

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.

How the application works

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:

  • Authorize.Net
  • Stripe
  • QuickBooks
  • UPS
  • eBay
  • Amazon
  • Yahoo

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 withdraw my funds?

When you're ready to borrow, you can access your Kabbage line of credit one of three ways:

  • Kabbage Card. Kabbage offers a card you can swipe like a credit card. You can used it anywhere Visa is accepted.
  • 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.

What sets it apart

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.

Is Kabbage legit?

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.

Business loan ratings

★★★★★ Excellent
★★★★★ Good
★★★★★ Average
★★★★★ Subpar
★★★★★ Poor

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.

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.

Expert review

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.

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