ByA Complete Guide to the Kabbage Small Business Loans
In recent years, alternative and online lenders, like Kabbage, have been on the rise. This is primarily due to the ability of alternative lenders to utilize technology and offer more readily accessible small business loans. They also have flexible eligibility requirements, especially in terms of credit scores and annual cash flows.
In this guide, we will break down the Kabbage small business loans to help you determine if their loaning options are good for your business. DoNotPay can help you increase your chances of loan approval by creating a concise and convincing loan request letter for you.
What Type of Small Business Loans Does Kabbage Offer?
Kabbage provides small business loans in the form of lines of credit, which are funded by the American Express National Bank.
With a line of credit, your business is assigned a loan limit that you can draw from whenever you need the money. This means you can obtain any loan amount at any time, provided that you do not exceed your credit limit.
There are different types of lines of credit, for instance:
- Secured line of credit—Requires you to put an asset as collateral in case you fail to pay the loan
- Unsecured line of credit—Does not require collateral for you to secure a loan
- Revolving line of credit—Works just like credit cards. All purchase amounts are deducted from your approved credit limit, while payments restore it
- Non-revolving line of credit—Allows you to borrow once, and you cannot use the limit once you pay off the loan
Kabbage provides only revolving lines of credit for small businesses. This makes it possible to use the funds for different purposes, such as:
- Financing daily operational expenses
- Covering the costs of starting a business or normal startup expenses
Kabbage Small Business Loans Eligibility Requirements
As with any other type of small business loan, you have to meet certain requirements to qualify for Kabbage funding. Your business needs to be operational for at least 12 consecutive months and have a valid business checking account. The entity also needs to have had an American Express business card for at least two months or to have been approved for Kabbage funding in the past.
Terms of Kabbage Small Business Loans
The terms of Kabbage loans, such as interest rates and loan amounts, are determined case by case—but the interest rates are generally higher than those of other funding opportunities, like SBA loans.
Kabbage uses the following information to determine your maximum credit limit and fees:
- Financial data from the accounts you link in your application
- Monthly business revenue
- Time in business
- Personal and business credit history
Once you apply, Kabbage will inform you of the terms they find appropriate for your business. The table below provides a summary of the usual Kabbage terms:
| Loan Term | Specifications |
|---|---|
| Loan amount | Up to $150,000 |
| Term | Six, 12, or 18 months |
| Loan fee | Varies |
| Annual and monthly maintenance fees | None |
| Approval time | Same day or in a few days |
Kabbage Small Business Loan Application Process
Kabbage funding applications are submitted online within a few minutes. To get a loan, you must complete the online application form on their website. The required information includes:
- Personal and business name
- Home and business addresses
- Home and business phone numbers
- Business tax ID and Social Security number
- Business industry
You must also allow Kabbage to make a hard inquiry on your personal and business credit reports. If your loan application is approved, the funds are sent to your bank account, which can take up to three business days, depending on your bank.
A Kabbage line of credit is not permanent. It is subject to occasional reviews and can be suspended or eliminated if need be.
Making Repayments for a Kabbage Small Business Loan
The first bank account you verify in your application process is regarded as your primary account. This account serves for depositing funds and withdrawing payments. When you accept the loan agreement, you permit Kabbage to automatically withdraw funds from the primary account for loan repayments. This is done automatically on the monthly due dates. You can check the due date and amount in the Funding Overview section of your Kabbage account.
Increase Your Chances of Getting a Loan by Using DoNotPay
The first step in securing small business loans is understanding how they work. After that, you must ensure your application documents reflect what lenders look for.
One of the most important documents is a loan request letter. It tells the lender concisely why they should fund your small business. We can help you draft a convincing loan request letter within a minute. Follow these simple steps to get your letter right away:
- Subscribe to DoNotPay
- Go to the Business Loan Request Letter product
- Answer our chatbot’s questions
- Upload the required documents
After you hit Submit, DoNotPay will generate your letter and forward it to your chosen lender automatically.
If your search for the best small business loans does not end with Kabbage, you can consider alternatives to cover your budget, such as:
We can help you find the available online lenders fast and stress-free. Open DoNotPay and locate our Find Online Business Loan Lender tool to make it happen.
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