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Kabbage Small Business Loans: 2023 Review

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Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated January 14, 2023

Overview of Kabbage

Kabbage provides cash management solutions to small businesses. Kabbage Funding™ offers commercial lines of credit ranging from $2,000 to $250,000. Each draw on the line of credit becomes a separate installment loan that charges monthly fees rather than interest.In addition to Kabbage’s line of credit, eligible small businesses can open checking accounts through the Kabbage Checking™ platform and accept customer credit card and debit card payments through the Kabbage Payments™ online tool.Founded in 2009 during the Great Recession and acquired by American Express in 2020 during the COVID-19 pandemic, the Kabbage technology platform can help small businesses borrow money with repayment terms ranging from six months to 18 months. Below, you’ll find a breakdown of how Kabbage Funding works.
Pros and cons


  • Quick application process
  • Easy to request funds from the business line of credit
  • You only pay fees on what you borrow
  • No origination fees, annual fees, monthly maintenance fees, or documentation fees
  • No prepayment penalties if you pay the loan off early


  • May have higher APRs than some lenders
  • Requires being in business for at least 12 months and having a valid business checking account
  • No long-term loan options available
  • Some businesses may not qualify for all loan terms
  • Multiple industries are not eligible for Kabbage Funding or Kabbage Payments

Kabbage Small Business Loan Terms, Rates, and Fees

Loan amounts: Lines of credit can range from $2,000 to $250,000.APR range: Total monthly fees incurred over the loan term can range from 2–9% for six-month loans; 7.5–18% for 12-month loans; and 15.75–27% for 18 month loans. Origination fee: NoneMinimum credit score: 640Time to funding: 1 to 3 daysCo-borrower needed: NoInformation accurate as of Jan. 14, 2023.

What Types of Loans Does Kabbage Offer?

Of the many different types of business loans, Kabbage offers small business installment loans through a flexible line of credit. The line of credit can range from $2,000 to $250,000. All loans drawn from the line of credit are subject to credit approval and are secured by business assets.All Kabbage loans also require a personal guarantee holding a person financially responsible if the business fails to repay the loan in full. The repayment term on a Kabbage loan can be six months, 12 months, or 18 months. Some businesses may not qualify for all terms, and some industries are not eligible for any Kabbage loans.Gambling establishments, cannabis dispensaries, adult retail stores, infomercial merchants, and registered money service businesses are generally among the industries not eligible for Kabbage Funding or Kabbage Payments, among other industries.Eligible businesses can borrow funds from the line of credit and spend the money on a variety of business purposes, including hiring staff and launching marketing campaigns. A small business may need a minimum credit score of 640 to qualify for a Kabbage Funding loan.

Important to Keep in Mind

The following businesses or industries may not be eligible for Kabbage Funding or Kabbage Payments:
  • Adult retail stores
  • Any merchant operating outside of the United States
  • Cannabis/marijuana dispensaries
  • Commercial leasing merchants
  • Escort services
  • Gambling establishments
  • Gun and ammunition dealers
  • Infomercial merchants
  • Pawnbrokers
  • Payday lenders
  • Registered money service businesses
Kabbage Funding is a digital product available to eligible businesses in all 50 U.S. states, the District of Columbia, and all U.S. territories.

Kabbage Loan Fee Structure

While many lenders use a traditional annual percentage rate or APR to help potential borrowers determine loan costs, Kabbage charges a monthly fee on all outstanding loan balances based upon several factors. These factors include the overall financial profile of you and your business.Whether an applicant is approved for a Kabbage line of credit and loan withdrawal is partly based on the applicant’s creditworthiness. Businesses with strong annual revenues and borrowers with excellent credit histories may qualify for the lowest fee. You pay the monthly fee during each month you have an outstanding balance.As mentioned earlier, total monthly fees incurred over the loan term can range from 2–9% for six-month loans; 7.5–18% for 12-month loans; and 15.75–27% for 18 month loans.The monthly fee rate on a Kabbage loan in some cases may have a higher APR than business loans offered by other lenders. APR is the annualized cost you pay to borrow money, and it can include all fees and finance charges. Some lenders may offer small business loans with annual interest rates of about 7% to 9%.

Other Lenders

Other lenders offer short-term business loans, including Bluevine, OnDeck, and Fundbox. Business loans in general can help you expand and grow your enterprise:
  • Bluevine: An online lender that offers small business lines of credit of up to $250,000.
  • OnDeck: Another lender that offers quick access to capital for businesses that might not qualify for a bank loan.
  • Fundbox: An online lender that offers lines of credit of up to $150,000 to qualified small businesses.

Applying for a Kabbage Small Business Loan

Applying for a Kabbage small business loan begins with applying for a line of credit. Eligible businesses can get approved for a line of credit ranging from $2,000 to $250,000. The approval process can take several minutes, and getting approved for a Kabbage line of credit allows you to request loan amounts up to the account limit.There’s no guarantee that Kabbage will approve your loan request. Kabbage may conduct a hard pull inquiry into your consumer credit and business credit reports before making any decisions on whether to approve or deny your loan request. Kabbage will also determine the terms and conditions on any approved loans, including whether you qualify for a six-month loan, 12-month loan, or 18-month loan.It can take up to three business days for the funds to appear in your bank account once your loan application is completed and signed.

Kabbage Funding Eligibility Requirements

Here are some of the eligibility requirements to qualify for a Kabbage line of credit:
  • The business has operated for at least 12 months
  • Must have a valid business checking account
  • Must have a valid business tax ID number
  • Must have a valid Social Security number
  • Your business must operate in the United States
  • The business owner must meet a minimal level of creditworthiness

Kabbage Loan Repayment

Borrowers are obligated to make at least minimum monthly repayments over the life of the loan. Borrowers may pay off the loan early without facing any prepayment penalties. Kabbage automates the payment process and attempts to withdraw money from your primary bank account to cover the minimum amount due each month.Kabbage may charge late fees if you have insufficient funds to cover your minimum monthly payment on time. Monthly repayments go toward loan principal and fee rate charges. Signing a Kabbage loan agreement authorizes Kabbage to automatically withdraw funds from your primary bank account to satisfy your minimum monthly repayments.

The Bottom Line

Kabbage Funding can provide small business owners with access to capital to meet their needs and expand their operations. You can also consider opening a Kabbage checking account and using the Kabbage Payments platform for your business needs.Lantern by SoFi can help you find small business loans of up to $2 million. Just fill out one simple form, explore your financing options, and apply for a small business loan that can provide you with the capital to grow your enterprise.

Frequently Asked Questions

What are the qualification requirements for a Kabbage loan?
What is the monthly fee for a Kabbage small business loan?
How do Kabbage loans work?
Is Kabbage legit?
Do Kabbage loans require collateral?
Does Kabbage run your credit?

About the Author

Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanSulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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