Compare Kabbage vs. LendingClub business financing

We compare two non-bank business lenders on fees, rates and reputation.

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Gone are the days when you had to walk into your local bank with piles of paperwork and wait weeks to learn whether your business is eligible for a loan or line of credit. Today, you have many online options offering lower rates, greater repayment flexibility and quick funding.

Kabbage and LendingClub are two such online lenders that are worth a look for unrestricted business loans.

Winner snapshot

Kabbage logo lendingclub logo
Funding speed Tie Tie
  • Winner
Lending limits Tie Tie
  • Winner
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An overview of Kabbage and LendingClub

Kabbage and LendingClub both offer small business loans that come with easy online applications, competitive rates and fast funding. They work to simplify the process you’ll typically find at your local bank, often requiring less paperwork and time.

Founded in 2008, Kabbage is a direct lender offering business lines of credit for ongoing funding without tapping into your cash flow. You can often get a decision on your application in minutes and loans are available in all 50 states.

LendingClub is a bit older, founded in 2006. It too is known for quick, simple applications, but it offers secured and unsecured business term loans in addition to lines of credit. Unlike Kabbage, LendingClub is a peer-to-peer marketplace that connects investors to borrowers. It also provides an advisor to guide borrowers every step of the way.

First, am I eligible?

Both Kabbage and LendingClub require minimums for how long you’ve been in business and how much you bring in annually before it’ll consider your application. But LendingClub’s requirements are definitely a bit more involved.


You can apply for a small business loan with Kabbage if:

  • You’ve been in business for at least a year.
  • Your business brings in at least $50,000 annually or had revenue of at least $4,200 per month in the last three months.
  • Kabbage also claims that you can improve your eligibility by opening up your checking and other business accounts to its review.


LendingClub small business loans come with stricter requirements:

  • You must’ve been in business for at least two years.
  • Your business must bring in at least $75,000 annually.
  • Your credit history must be clear of bankruptcies, asset seizures and tax issues.
  • You must own at least 20% of your business.
  • Your personal credit score must be 600 or higher.

Which lender can get me money faster?


To apply for a small business loan with Kabbage, you first create an account with your email and password, telling Kabbage the name of your business and your industry. You then link your business accounts — your business checking, PayPal, eBay, Amazon or QuickBooks and more — and submit your personal and financial details.
It takes only a few minutes after you’ve submitted your application to learn whether you’re approved and how much you’ve qualified for. Once you accept a contract, Kabbage makes your line of credit available to you online within a few days.


It’s also easy to apply with LendingClub — you simply go to its site, indicate how much you’re looking for and complete personal, business and financial details. Within minutes, you’ll receive offers from numerous “investors” interested in providing funds for your loan. Once you accept a quote, your money is deposited into your bank account within a few business days.

  • Winner: Tie

    Both lenders use technology that makes applying, approval and funding easy and quick.

Which has a better reputation?


Looking at Trustpilot, you’ll see that Kabbage has received more than 3,000 reviews with an average of 9.3 out of 10. More than 80% of its users rate it excellent rating. Still, you’ll find complaints about high monthly payments that come with its flexible lines of credit.


For such a big name, it’s surprising that Trustpilot shows only seven reviews for LendingClub. Still, those seven users result in a score of 8.1 out of 10, with six of them rating its services as excellent. In forums, you’ll see concerns about spikes in defaults for “investors” — those connected to borrowers in the peer-to-peer marketplace.

  • Winner: Kabbage

    With more —and often better — reviews, Kabbage ekes out a win for reputation.

How much can I borrow with each lender?

Applying with either lender doesn’t require a hard pull on your credit. Consider applying to see what you’re eligible for, and then add these potential rates and terms to your list of factors when comparing your options.


Kabbage offers business lines of credit from $500 to $250,000.


LendingClub to offers business lines of credit and term business loans — each with amounts ranging from $5,000 to a high $500,000.

  • Winner: It depends

    If you’re looking for less than $5,000 and don’t mind a line of credit, Kabbage is the only of the two who can help. LendingClub, on the other hand, offers two types of business funding — a boon if you want a business term loan specifically — with a higher limit than you’ll find with Kabbage.

Which lender offers more affordable financing?

Kabbage technically doesn’t charge “interest” on its lines of credits, but you will pay monthly fees based on a complicated fee structure broken down by months and percentages (which sounds an awful lot like interest to us). LendingClub is a bit easier to understand, with APRs on your total loan and fees based on the type of loan you take up.


Kabbage doesn’t charge interest on their loans. At least that’s not what they call it: They’ll still tack on a percentage of your balance each time you make a repayment.

Every month, you pay back an equal amount on your principal plus a monthly fee that can be up to 10% of your loan amount, depending on your creditworthiness. Fees are further broken down by six-month or 12-month terms, though you won’t pay this fee until you actually withdraw money.

As for other fees, Kabbage charges no origination fees or prepayment penalties, which gives you some room to save on interest by paying off your loan early. But miss your repayment by more than four days, and you could be slapped with a late fee from $10 to $100, depending on how much you owe.


For a business line of credit with LendingClub, you can be approved for APRs that range from 2.75% to 18.35%. You’ll also pay a fee of 1% to 2% each time you withdraw money from your line — called a “draw fee” on LendingClub’s site.

Business term loans come with APRs that roll together fixed rates and origination fees of up to 7%. These rates and fees result in APRs that range from 4.99% to a high 35.11%. The rate you get largely depends on your business’ financial strength and your personal credit score.

Like Kabbage, LendingClub won’t penalize you if you find yourself able to pay off your loan early. But rather than four days, LendingClub gives you a 15-day grace period before charging a late fee of either $15 or 5% of your repayment, whichever is more. If you’re old school and like to pay by check, you might want to reconsider: You’ll be charged a $7 fee for check payments.

  • Winner: LendingClub

    Kabbage’s fee structure can be hard to follow. LendingClub’s credit line and term loans win this one mostly due to transparency and ease in determining how much you could owe.

Case study: Alicia expands her fashion empire

After running a fashion boutique for five successful years, Alicia wants to open a new outlet. Crunching the numbers, she finds that $20,000 should help get her new store off the ground.

Knowing that her expenses are irregular, so looks only at a line of credit, comparing online lenders Kabbage and LendingClub to see who comes out on top.

Kabbage LendingClub
Fees 1.5% to 10% fee of the principal for first 6 months and 1% of remaining principal for last 6 months 1%–2% withdrawal fee
Ease of application You’ll hear back from them almost immediately after you submit an easy online application, with funding soon after. You’ll get a response soon after submitting your online application.

Alicia finds that both lenders offer easy applications with fast turnaround, so she looks specifically at how much she’ll pay over the life of her loan. With Kabbage, Alicia first needs to break down his $50,000 into 12 monthly payments — about $1,670 a month. With the fees that come with Kabbage’s loan, she finds that she could pay $250 to a whopping $2,000 a month in fees on top of her already-high monthly payment for at least the first six months of her loan, with easier-to-swallow fees of about $100 for the last six months.

With LendingClub, Alicia could pay anywhere from $550 to $3,670 over the life of her line of credit, should she tap into the full amount. She’ll also pay a fee of 1% to 2% of each withdrawal amount.

In the end, Alicia is approved at the lower APR end for LendingClub, making her decision easier — and her payments more transparent.

Get Kabbage business loans
Get LendingClub business financing

Bottom line

Both Kabbage or LendingClub are easy-to-use online lenders that make it easier for you to get business funding than marching into your local bank. How much you need and how long you’ve been in business will ultimately determine your rates and terms.

If you don’t have strong credit and need funding quickly, it could be easier for you to get a short-term line of credit with Kabbage. But if you’re looking for more than $250,000 or a longer-term loan, look into LendingClub.

Either way, you may want to compare your full range of options with other providers before making a decision on your small business lender.

See how other top business financing providers compare

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