Kabbage - Small Business Loans

Kabbage has been helpful in extending a loan to my small business when I needed it most. Vey few other companies (including my own bank [PNC] who I've been with for 7 years) would extend a loan to me based on limited credit history and outstanding personal loans. Thankfully I was approved by Kabbage. I thought I understood the terms but after my first "pull" of money they changed things slightly.

Be aware of:

Very high interest rates. For a 6-month loan, the total interest I pay is clos to 19%! That's a 38% APR! You are better off getting a credit card and paying it off in six months.

They lump your loans together, magically. At the time you take out each loan or "pull" money from your available cash, they treat it as a separate loan. BUT, when you go to repay it they lump all your loans/interest/costs together. There are no reference numbers on the statement so you can't tell which loan the interest belongs to.

Support is email ONLY. That's it.

When you take a loan out, you are AUTOMATICALY enrolled in their auto-payment, and you cannot opt out (I asked). So if your due date is March 1st and you haven't made a payment by March 1st (the whole monthly payment due by the way), they will log into your bank account and take it out for you :) Read the fine print. You gave them your login credentials when you had them check your creditworthyness.

Overall I am thankful they extended money to me when no one else would. But is taking out $5000 worth it when you will pay $950 in interest? Our product markup is on 20-30% so we would lose all of our profit to interest and then we are out of business.

I have had Kabbage for over 2 years and the interest is high, but you knw in advance.  My advice, don't do business with them.  If you miss a payment, they will deduct it out of your checking account without authorization or any prewarning.  Not even on your due date, but some random day in the month.  Can't wait to pay in full and say goodbye!

kabbage will lie to you work out a payment plan but then you end up owing more than the orig balance after payment is made

do not take a loan warning!

Between eBay fees, Amazon fees, cost of you products, shipping, and the cost of your living, there is no room to grow with Kabbage, their interest becomes 30%+ after you've paid it off. I was renting a beautiful 5 bed house and now had to move to an apartment still suffering on payments. Stay away, you are better off borrowing from friends, family, or a general bank like WellsFargo of B of A stay away from these mafia member loan gangsters. Working "capital" works for these banks not us hard working business owners. STEER CLEAR

Kabbage is definitely a viable source of funding for small businesses trading through eBay, Etsy and other ecommerce platforms. But it's important to understand exactly what you are getting into!

This is a short term working capital facility, good for expanding a promising and viable business. It is NOT a "line of credit" or "bank loan" in the conventional sense. It is also NOT where you need to be if you're scraping bottom and desperately need money to pay your next electric bill! It is NOT "free easy money" for the chronically broke. Go get a "payday loan" instead, or pawn the family silver. With that said...

I personally have been using Kabbage since February 2014, and I use it mostly to smooth out significant seasonal variations in my eBay business. Kabbage loans have allowed me to BUY inventory during the summer when it's cheapest, and hold on to it and then SELL during the fall and winter when selling prices are the best. Before, I had to turn around and sell immediately, and could never take advantage of good purchasing opportunities during the summer, because I didn't have the sales to pay for them. Kabbage funding allowed me to grow my sales about 70% last year, compared to previous "organic" growth of about 10-15%. Even after the cost of the loans, I come out way ahead.

The application process IS easy, and you qualify for funding based on your record/history where you sell-- your credit score doesn't really matter. Small business "micro loans" are notoriously risky, and thus expensive-- it's also why commercial banks often will not even TOUCH them. Odds are Kabbage will give you money, but understand that it's costly. So think carefully before you borrow: Do you have an actual PLAN, or do you merely "need money?" If the latter is true... think twice before getting in bed with Kabbage.

Kabbage gets 4-- rather than 5-- stars from me mostly because of the way they structure their loans. Even though each time you borrow (or "draw") is considered a separate loan, you cannot apply repayment towards any specific loan. And your repayments are always applied to the OLDEST loans first. Why is this bad? Because if you take new loans on a regular basis, you are ALWAYS stuck with the high front-end interest rates (5-8% for the first two months, compared to 1% for the last four). For example:

Let's say you have a $10,000 existing balance, and borrow another $1000. Even IF you have enough money to make your scheduled monthly payment AND pay off the "new" $1000... you don't get to. You cannot specify that you want to pay off the loan you took two weeks ago (costing you 7%), your $1000 gets applied to your OLDEST outstanding loans, the ones that are costing you only 1%. Credit counseling (and general wisdom) says you should always pay off your highest interest debts first... the Kabbage format pretty much dictates that you to pay off your LOWEST cost loans first, so you're always holding the most expensive debt, paying the highest fees.

A couple of minor ****les include the minimu draw being $500-- I can often use less than that; and the fact that you must be aware that if your loan due date is "the 26th of the month," that payment flies out of your PayPal account at three minutes after midnight, not during "banking hours." So don't depend on being able to make the deposit you need during "banking hours" on your due date.

Aside from that, I really don't have any complaints-- I was unable to get funding from my bank (they wouldn't consider a business loan under $20,000-- and I didn't need that) and besides, my credit is only in the "poor-to-fair" range which raises red flags and closes most doors to funding. I'm "high risk," and given that, Kabbage was my best option. Customer service (I've used 3-4 times) seems good, courteous and quick and-- as others mentioned-- "in English."

Be very careful when using Kabbage. They will give you quick easy access to large sums of money, but remember you will be paying them A LOT of money in interest and will need to pay it back in only 6 months. If you are unable to pay on time, sometimes they will grant you an extention, but sometimes they will not. When they refuse to grant an extention, they will continuously take every penny out of your Paypal account multiple times per day. This can easily ruin your business if you are not careful. I have experienced rude customer service from them. After being denied an extention, a girl on the phone said to me "Well if you're not willing to pay..." and then said something about how they would come after me for the money, when in reality I was willing to pay, hence why I was calling them. I was not capable of paying the full balance at the time. Being willing and being capable are two different things. I was asking for help and they denied me and were rude, so I was disappointed with that experience.

DO YOU NEED A LOAN? HERE IS MY TESTIMONY ON HOW I GOT MY LOAN
Hello, Good day to everybody reading this,

My name is Elizabeth Forbes from United States. I want to thank Mr John Michaels who helped me to get a loan. For the past three months, I have been searching for a loan to settle my debts, everyone tried to dupe me of my money until I finally met Mr John. He was able to give me a loan of $10,000 USD. He can also help you. He has also helped some other colleagues of mine. If you need any financial help, kindly contact his company through email: aceloanservices@hotmail.com I believe he can help you. Contact him to get help just as he helped me. below are his words of encouragement to those seeking for a legit and honest private loan lender.

"Do you need a loan to pay off credits and debts? Do you need finance to set up your own business? Do you need loans to carry out large projects? Do you need college loan? Do you need funding for other various purpose? email: aceloanservices@hotmail.com"

Thank you for reading and good luck.

I highly reccomend you don't use this company. The have argued with me on facebook, lied to me about several things. No one knew what the other offered. Let me down. I was never late always early and still was threatened. I dislike this company very much. High Interest as well. But man to attack and accuse me on their facebook page. If I were late it would still be wrong but I was never late. 

I would not recommend anyone doing business with Kabbage.   If you have to pay on average 25% annual interest, then include yoru ebay fees, paypal fees, you better have one heck of a mark up.  Your locla bank will be a better bet. 

I have an account with Kabbage, and currently use it. Initially I was irritated with them because they said I was preapproved, but after applying they denied me. About 4 weeks after applying I received an email from Kabbage saying I had $10,300 available to borrow and it was based on my history with them. I didn't really understand that, but whatever they were offering me money so I didn't care. Initially I did not use the money because as others have stated the interest is high. 10% for each of the first 2 months then 1% each of the last 4 months. I contacted customer service to ask about getting a lower rate for the first 2 months, and they were very polite and professional. However they told me the rate would remain where it was at until I've taken out some loans and paid it back on time, and that's understandable. I didn't use any of the money for about a month then I got to a place where I needed to use the money to make a purchase for my business. I used the money to purchase an item I was going to turn around and sell right away, and I was going to payoff the loan before the second months interest accrued. In this situation it was worth it to use the money and pay 10% because my profit was substantial enough that 10% seemed worth it, and I wouldn't have been able to complete the sale without this money being made available to me. I would recommend using this approach if you do use Kabbage because you can save a large amount of money on interest.