Pros & Cons
- Streamlined application process with minimal documentation required.
- Financing up to $250,000 available within a few days.
- Accepts borrowers with a minimum credit score of 640.
- Monthly repayment schedule (as opposed to daily or weekly).
- No prepayment penalties, account maintenance fees or draw fees.
- Must have online checking or PayPal account to verify cash flow.
- Personal guarantee required.
- Complex monthly fee structure.
- Can’t be used to build business credit.
Kabbage is an online lending platform that offers small-business loans to borrowers with a 640 FICO score or higher. Acquired by American Express in 2020, Kabbage is known for its streamlined application process in which borrowers can connect their business checking accounts and, in most cases, receive a decision in just minutes.
Although you can sign up for Kabbage business checking, business owners are not required to use that account to qualify for financing.
How Much Do You Need?
Kabbage is best for borrowers who:
Don’t have perfect personal credit: While underwriting your loan, Kabbage focuses on less traditional information like banking, accounting and e-commerce data. That makes it a good fit for business owners with rocky credit histories.
Need cash faster than conventional loans: With an online application that can be completed in minutes, you can be approved for a line of credit and funded within a few days, at most.
Prefer a short repayment period: Kabbage offers loans of up to $250,000 with repayment terms of six, 12 or 18 months.
» MORE: Compare working capital loans
Kabbage loan features
Kabbage offers business lines of credit from $2,000 to $250,000 with repayment terms of six, 12 or 18 months.
$2,000 to $250,000.
Estimated APR range
Instead of traditional interest, Kabbage charges monthly fees of 0.25% to 3.5% depending on your loan's term. According to a Kabbage representative, these fees equal an estimated APR of 9.00% - 36.00%.
6, 12 or 18 months.
As soon as the same day. May take up to three business days for funds to process, depending on your bank.
Where Kabbage stands out
Faster access to cash compared to traditional lenders
Kabbage is a good option for business owners who need cash immediately and don’t mind paying higher rates for the speed. The application process doesn’t require paperwork. Instead, you connect a business checking account, bookkeeping software or payment solution (such as PayPal or Square) to the Kabbage platform and the company uses data from these accounts to evaluate your eligibility.
Available to startup businesses and business owners with fair credit
Although Kabbage may not be as startup-friendly as some competitors (who work with companies with only six months in business), borrowers with just 12 or more months in business can qualify for this line of credit. Startup business lines of credit can be used to manage cash flow gaps, cover short-term expenses or take advantage of unexpected opportunities.
Similarly, if you have fair credit — and can’t qualify for a bank small-business loan — Kabbage can be a good choice for access to working capital. Although Kabbage has a minimum credit score requirement of 640, the company primarily considers data from the accounts you link, your average monthly revenue and the number of years you’ve been in business to evaluate your application, determine your credit limit and set your fees.
No extra fees
Whereas some lenders may charge draw fees or account maintenance fees with their line of credit products, Kabbage does not charge any extraneous fees. With a Kabbage line of credit, you’ll pay a monthly fee (equivalent to interest) during the months you have an outstanding balance. Kabbage does not charge application fees, origination fees, annual fees, account maintenance fees, documentation fees or draw fees.
You also have the option to pay back your loan early; Kabbage does not charge any prepayment penalties.
Where Kabbage falls short
Complex fee structure
Kabbage charges a fee each month that you have an outstanding balance — instead of a more traditional interest rate. You’ll pay this fee in addition to your monthly loan principal payments.
The specific fee you receive will vary based on your loan term, as well as your creditworthiness and other factors. Here’s how the fee ranges break down based on term length:
Six-month term: 0.25% to 3.50%.
12-month term: 0.25% to 2.75%.
18-month term: 0.25% to 2.50%.
Let’s say, for example, you draw a $60,000 loan with a 2% fee to be repaid over a six-month term. Your repayment schedule would look like this:
Repayment toward principal
Total monthly payment
The estimated APR for a loan with these terms would be roughly 14.2%.
Each time you draw from your line of credit, Kabbage issues you a separate installment loan with its own loan agreement. You’ll then pay fees on each individual loan.
Use our Kabbage loan calculator below to get a sense of the cost of a business line of credit. Enter a withdrawal amount, repayment term and monthly fee to estimate your total fee amount, total repayment amount and APR.
Not suitable for all businesses
Kabbage offers small-business loans only in the form of lines of credit and doesn’t offer any other products, such as term loans or invoice financing. If you’d prefer a different type of business loan, you’ll have to consider other lenders.
Kabbage lines of credit are also available only in small amounts — up to $250,000 — with short terms of up to 18 months. Businesses that are looking for larger loan amounts or longer terms will want to explore alternative options.
Can’t build business credit
Kabbage does not report payment history to the commercial credit bureaus. To build business credit from timely payments, you’ll need to find an alternative product.
Building business credit can help you qualify for larger business loans with lower interest rates in the future.
Kabbage loan requirements
Kabbage’s minimum borrower eligibility requirements include:
Credit score: 640 or higher.
Time in business: One year or more.
Monthly revenue: $3,000 or more.
You must be able to link a bank account that shows business revenue to qualify for a Kabbage line of credit.
How to apply for a loan from Kabbage
You can apply for a Kabbage line of credit online. First, you’ll need to create and log in to your Kabbage account. Then, you will connect your business checking account and any additional accounts to the Kabbage platform.
Kabbage will also ask for basic information about you and your business including:
Your name, home address and phone number.
Your business name, address and phone number.
Your business industry.
Your business tax ID.
Your Social Security number.
Before you submit your application, Kabbage will ask you to consent to a hard pull on your credit.
If Kabbage can verify your information, you should receive a decision almost instantly. If your application needs further review, it may take four to seven business days for you to get a decision.
If you are approved for a Kabbage line of credit, you’ll receive a loan agreement that lays out your credit line amount, term length and monthly fees. Kabbage will also provide a comparable APR so that you have a sense of how much the line of credit will cost.
You will have to sign a personal guarantee as part of your loan agreement.
Alternatives to Kabbage
Like Kabbage, online lender OnDeck has a streamlined application process. OnDeck offers business lines of credit of up to $100,000 and term loans of up to $250,000. OnDeck lines of credit require weekly repayments, whereas Kabbage’s repayments are monthly, but the company will accept a minimum credit score of 600. Interest rates on both products run high compared with Kabbage, however.
For more details on how they compare, read our Kabbage vs. OnDeck comparison review.
Bluevine offers a business line of credit up to $250,000. And similar to Kabbage and OnDeck, Bluevine can approve applications in just minutes. Interest rates on a Bluevine line of credit range from 15% to 78% APR with terms of six or 12 months. However, unlike OnDeck or Kabbage, Bluevine will accept businesses with six or more months in business.
Learn more about these products in our Bluevine small-business loans review.
Compare business loans
If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.
Frequently asked questions
Kabbage has issued more than $9 billion in small-business loans since its founding in 2009 and is now backed by American Express. Kabbage has a 3.5-star rating on Trustpilot and says it follows industry standard security practices to protect your private information.
Yes, as part of the application process, Kabbage will perform a hard credit pull on your personal and business credit scores.
No, Kabbage does not currently file UCC liens on its business line of credit borrowers.
Kabbage is not currently an SBA lender.
Prior to its acquisition by American Express, Kabbage participated in the federal Paycheck Protection Program and issued those loans as an SBA-approved lender and in partnership with other SBA-authorized banks.
Businesses that received PPP financing through Kabbage can manage their loans and the forgiveness process through its servicing division KServicing.