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Kabbage business loans review 2022

Kabbage Funding has relaunched its working capital lines of credit for small businesses.

finder.com’s rating: 4.2 / 5.0

★★★★★

Bottom line: Kabbage Funding’s small business line of credit are designed to give you the cash flow you need for expenses like inventory and payroll. It’s less expensive than your average online lender — but business owners complain about a lack of customer service.

Details

Min. Amount$1,000
Max. Amount$150,000
Loan Term6, 12 or 18 months
APR9% to 36%
Financing fee0.25% to 3.5% per month
Requirements1+ years in business, valid checking account

Pros

  • Lower fees than the 2019 Kabbage line of credit
  • No withdrawal fees
  • No prepayment penalties

Cons

  • No credit limits over $150,000
  • Must draw at least $500 every time
  • Reviews cite poor customer service

Our take on Kabbage small business loans

This online lender offers short-term lines of credit designed for small business owners who want an alternative to financing from a traditional bank.

Kabbage stopped its regular lending program during the COVID-19 pandemic to focus on issuing loans through the paycheck protection program (PPP). After American Express acquired Kabbage in 2020, it launched Kabbage Funding — but only for current American Express customers. Now small businesses can qualify even if they aren't an Amex customer, as long as they meet Kabbage's other eligibility requirements.

Kabbage Funding works a lot like the Kabbage line of credit that was available in 2019. But the new monthly fees are lower than the 1.5% to 10% Kabbage previously charged. And the 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, new Kabbage Funding is now less expensive than similar lenders like OnDeck and BlueVine.

But customer reviews have taken a turn for the worse since the Amex acquisition. Customers complain of a lack of customer service and long approval times. Other lenders may offer more support or fund your loan more quickly.

Kabbage no longer offers PPP loans

The Small Business Administration (SBA) stopped accepting new PPP loan applications on March 31, 2021. But if you received a PPP loan through Kabbage, you can apply for forgiveness and manage payments through Kabbage's servicing company, K Servicing.

For questions about the PPP loan forgiveness process, email pppforgiveness@kservicing.com. Or reach out to a local SBA resource partner to learn about other COVID-19 relief options available to small businesses in your area.

Kabbage charges a monthly fee instead of interest

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.

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

  • For a 6-month loan, you must draw at least $500 and pay a monthly fee of 0.25% to 3.5%.
  • For a 12-month loan, you must draw at least $10,000 and pay a monthly fee of 0.25% to 2.75%.
  • For an 18-month loan, you must draw at least $20,000 and pay a monthly fee of 0.25% to 2.5%.

That works out to an APR of 9% to 36%. Online business lenders typically charge rates that range from 7% to 100%, according to research by business loan marketplace Nav.

The catch is that you can take out more than one loan at a time. If you take out a second or third loan, that will increase your monthly payments.

Kabbage reviews cite poor customer service

BBB accredited No
BBB rating F
BBB customer reviews 3.3 out of 5 stars, based on 575 customer reviews
BBB customer complaints 2,137 customer complaints
Trustpilot Score 3.6 out of 5 stars, based on 6,732 customer reviews
Customer reviews verified as of 01 December 2021

Kabbage reviews have taken a turn for the worse since Amex acquired the company. Many reviews are complaints about how difficult it is to reach customer service. It also gets an F rating from the Better Business Bureau (BBB) because it has a high volume of complaints about K Servicing's unresponsiveness to PPP loan forgiveness applications.

Several Kabbage customers also mention that it took longer than expected to get approved. But a few say the application process was smooth and set them up for success when they needed funding in an emergency.

Eligibility requirements

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

  • At least 12 months in business
  • Valid business checking account

While Kabbage doesn't publish a minimum credit score, it runs a credit check on your business and personal credit scores. There also isn't an annual revenue cutoff. But 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.

Start your application online or through the Kabbage app

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 say that it can take around three days on sites like the BBB and Trustpilot.

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.

Kabbage is a legitimate business lender

Kabbage is owned by American Express, 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.

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 not as fast as other options. For example, OnDeck offers same-day approval and an instant turnaround. Other providers also tend to get better customer reviews. If cost is not your top priority, then another lender could be a better choice.

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.

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.

Name Product Filter Values Loan amount APR Requirements

Biz2Credit business loans
Finder Rating: 4.7 / 5: ★★★★★

Biz2Credit business loans
$25,000 – $6,000,000
Starting at 5.99%
6+ months in business; $100,000+ monthly revenue; 500+ credit score
Get only the capital you need through secure, prescreened lenders with this highly rated company offering SBA, expansion, working capital and other loans.

Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★

Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.

ROK Financial business loans
Finder Rating: 4.7 / 5: ★★★★★

ROK Financial business loans
$10,000 – $5,000,000
Starting at 6%
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.

OnDeck short-term loans
Finder Rating: 4.6 / 5: ★★★★★

OnDeck short-term loans
$5,000 – $250,000
As low as 35%
600+ personal credit score, 1 year in business, $100,000+ annual revenue, active business checking account
A leading online business lender offering flexible financing at competitive fixed rates.

Fundbox lines of credit
Finder Rating: 4.2 / 5: ★★★★★

Fundbox lines of credit
$1,000 – $150,000
Not stated
6 + months in business, $100,000+ in annual revenue, 600+ credit score
Get flat rate, short-term financing based on the financial health of your business, not your credit score.
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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.

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