KABBAGE BUSINESS STARTUP LOAN REVIEW – Business Startup Loan

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KABBAGE BUSINESS STARTUP LOAN REVIEW – Business Startup Loan (hover to zoom) (tap once to zoom, tap left, right, top, bottom to move image, tap outside of image to cancel)
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Owning a small business gives you ultimate satisfaction especially if it has been your long-term goal to start a self-sustaining enterprise. However, in the turbulent market environment, having enough cash reserve to either start or expand your small business is tricky. Sometimes budding businesses find it hard to raise enough capital to help them grow. They, therefore, look for fast and flexible loans to start a business such as Kabagge to give them business startup loans.

About Kabbage – Business Startup Loanbusiness startup loan

Kabbage was established in 2008 with the aim of helping small business owner’s access small business startup loan and other lines of credit. Originally, the company was only focusing on online retailers but later decided to reach out to the brick and mortar businesses. The company has grown to become a leading marketplace lender offering various lines of credit and business startup loan to eligible small enterprises. According to their website, since their incorporation, they have funded more than $5550 million startups.

Rather than offering traditional instalment loans that are paid over the course of a set period, the company provides small businesses with a line of credit providing flexibility which allows clients to pay what they borrow. The company sets itself apart from its competitors by offering optimised process which takes a few minutes to get approved.

Kabbage Small Business startup loan Details: Business loan requirements

The company’s line of credit ranges from $2,000 to $100,000 and be accessed anytime. All the loans are supposed to be repaid before the elapse of six months. The loans provided by Kabbage don’t have flat interest rates. The clients are assessed and asked to pay a fee of 1% to 12% of the borrowed amount for the first two months after receiving the loan. Then, after the elapse of the first two months, they are required to pay 1% of your selected loan amount.

The actual amount of money to be paid back every month is 1/6th of the total loan, plus the monthly fee agreed upon after assessment.

Loan Application Process and Business startup loan Requirements

Kabbage has one of the swiftest application and funding processes since it is entirely online. You will be asked to present read-only access to your business bank and other accounts such as Amazon, eBay, PayPal, Shopify, Authorize.net, and Yahoo.

The information you provide will be used to validate your transactions and also to determine the amount of cash you will be given. You will also be asked to provide your business information, personal information, and information that relate to your credit score. For business loan requirements, Kabbage will use the information from your business online presences and data channels to calculate the maximum credit line you can get as well as to determine your monthly fee. This is done by an algorithm that only takes few minutes to approve or deny your application.

Even though the company doesn’t have a minimum credit requirement, they use your credit history to evaluate and determine the risk involved. The only hitch you are likely to face is in your bank or identity verification as you may be asked to present more documentation such as a passport or a driver’s license.

The credit score is a nonissue when obtaining a small business startup loan from Kabbage. They are more concerned with your business’s profitability and use the information they get online and the one you provide to determine whether your business is has a healthy cash flow that can sustain the loan you are applying.

Customer Support

The company has invested more on phone hotlines. They have set up a call center where you can direct all your questions. You can also call them up or contact them through email. Despite, pulling their customer support to one avenue, they do it well, and this can be attested by the few complaints about customer service.

Pros and Cons of Kabbage

Pros

• Quick access to cash. If your business is in dire need a quick loan, then Kabbage is the best option. You can make your application and immediately get the money wire into your account. Their application is paperless, and the only thing you need to do is give them access to your business checking accounts so that they can use the information to evaluate your application.

• You can receive the loan even with bad credit. The company is a formidable option for small enterprise owners who cannot receive cheap loans from mainstream lenders due to bad credit. Although your credit history is factored in during the evaluation, it carries less weight compared to other things that take the center stage in your evaluation. The company is more concerned with you business’s cash flow and profitability.

• Kabbage offers some intuitive “perks.” When you come as partners, you may be rewarded with certain discounts on services. Furthermore, you can receive a $200 gift card once you refer a new small business to the company.

• They employ innovative underwriting techniques. Other than relying on traditional methods of pre-approval, the company uses new techniques such as use of online metrics from the most common platforms such as eBay, PayPal and Amazon to determine the amount of credit to give you.

Cons

• Complicated fee structure. The company’s repayment structure is not easy to comprehend. Each month you are required to pay 1/6th of the Amount borrowed. Then they complicate things by saying that you are supposed to pay a fee of 1% to 12% for the first two months and 1% for the remaining months. This structure is so complex and can be confusing to many individuals seeking loans to start a business.

• High rates. Compared to other small business startup loans, Kabbage’s repayment rate is far too high. To make sense of this, when we convert their rates to annual, it means there APR ranges from 32% to 108% per annum which means it is the most expensive business startup loan in the market.

The Verdict

Even though Kabbage’s fee structure is very high, it can come in handy when your small business needs instant cash. The fact that it takes the shortest time possible to be processed and approved is a plus for many budding enterprises. The other good thing is that many businesses will be eligible for this company’s services.

When it comes to startups, getting enough capital is a daunting task but with Kabbage, capital is there when you need it. However, before you decide to start a business, set up a solid business plan and compute financial requirements before its opening. If you choose Kabbage to be your source of capital, it is wise to set up a separate account from your personal account so that you can be in control and make the payment as you wish.

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