Your Guide to the Top Kabbage Competitors of 2019

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The Best Kabbage Competitors Available in 2019

If you’re looking for small business loans, you’ll have many different lenders out there willing to work with you—from traditional banks to alternative financing companies.

One lender that will surely pop up during your search is Kabbage, an alternative lender that offers offers a solid short-term line of credit option.

If you’ve decided to shop your options, you might be wondering what the best Kabbage alternatives are.

There are plenty Kabbage competitors, and we’ve compiled a guide to the five best out there.

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The Top 5 Kabbage Competitors

For some reason or other, you’ve decided that it’s time to look into the best Kabbage alternatives on the market. Whether you’ve decided altogether that Kabbage isn’t the lender for you, or you simply want to see how they compare to their top counterparts, let’s take a look at the top five Kabbage competitors.

#1: OnDeck Capital

When you do a quick search for the top Kabbage competitors, the most common alternative you’ll see is OnDeck Capital.

OnDeck is both a line of credit lender and a short-term loan lender, and the OnDeck lines of credit are the closest loans like Kabbage’s you’ll be able to find on the market.

Lines of credit with OnDeck range from $5,000 to $100,000. OnDeck only offers a repayment period of six months once you draw from the line, and at 13.99% to 36%, their APRs are around as expensive as Kabbage’s.

To qualify with this Kabbage competitor, you’ll need at least a 600 credit score. You’ll also need to prove your annual revenue to be $100,000, and have been in business for a year

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Kabbage vs. OnDeck

While OnDeck offers a very similar product to Kabbage, there are some notable differences.

First off, OnDeck doesn’t offer as large a maximum line of credit amount, and they also only offer a six-month repayment period, whereas Kabbage extends to 12 months for some borrowers.

Kabbage has a unique fee structure (which we will cover shortly) that sets itself apart from all of the Kabbage competitors. Meanwhile, OnDeck has a traditional interest rate structure. And though OnDeck’s APR range might have a lower maximum APR than Kabbage’s APR,  the interest rate you qualify for will be totally dependent on your eligibility as a borrower.

Speaking of qualifications, though, OnDeck does set a slightly higher threshold for eligibility—their 600 personal credit score minimum and higher bar for annual revenue requirements make them a bit trickier to qualify for. That said, OnDeck does work with slightly younger businesses, only requiring nine months in business to qualify.

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#2: Fundbox

Another of your top Kabbage alternatives will be the online lender Fundbox. Of all the Kabbage competitors, Fundbox offers the product that varies from Kabbage’s line of credit the most. However, Fundbox’s invoice financing ends up working much like a short-term line of credit in practice.

Fundbox loans are like Kabbage’s because, once you qualify for financing from Fundbox, you’ll be able to draw funds from your Fundbox account and pay them back over 12 or 24 weeks.

Fundbox offers funding ranging in size from $1,000 to $100,000 with rates of 0.5% to 0.7% of the original invoice value per week.

Even more, because Fundbox bases their underwriting off of your business’s outstanding invoices, their minimum requirements will be even easier to meet than Kabbage’s. All you’ll need is six months in business to qualify for Fundbox invoice financing.

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Kabbage vs. Fundbox

How does Kabbage measure up to this competitor? Well, if you’re looking for funding of over $100,000, then Kabbage wins out—their credit limits can be up to $250,000, whereas Fundbox will only dole out up to $100,000 at a time.

However, if you’re a young business with under a year in business and you don’t quite reach Kabbage’s minimum annual revenue requirement, Fundbox might be the best Kabbage alternative for you.

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#3: BlueVine

While traditionally a invoice financing company, BlueVine also offers a line of credit product called the “Flex Credit” that’s similar to Kabbage’s line of credit.

This Kabbage alternative offers $5,100 to $250,000 in line of credit amounts with a fixed six-month repayment period. Interest rates for BlueVine’s line of credit will range from as low as 6.9% – 17%.

To qualify for BlueVine’s line of credit product, you’ll need at least a 600 personal credit score and at least $120,000 in minimum annual revenue. However, they do only require you to have six months in business to qualify.

Should you qualify for BlueVine’s line of credit product, you’ll repay any funds you draw with weekly payments.

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Kabbage vs. BlueVine

If you’re a slightly more qualified borrower (meaning you have higher revenues and a higher personal credit score), then it could pay off to work with BlueVine. Their median interest rate is pretty high, but you could qualify for a lower interest rate in the end. Plus, BlueVine works with younger businesses, unlike Kabbage.

That said, if you’re looking for a longer repayment term, then Kabbage offers the possibility of a 12-month repayment period.

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#4: Lending Club

Of all the top Kabbage competitors, Lending Club will be the longest term, most affordable alternative.

Lending Club is an alternative lender that offers medium-term loans that work a lot like traditional bank loans, but will be much easier to secure.

Lending Club offers business funding of up to $300,000, so if you’re looking for a larger business loan, then this will be the winning Kabbage competitor for you.

Lending Club funding will come with rates ranging between 5.9% and 25.9%, meaning they offer the lowest rates of the Kabbage alternatives.

To qualify with Lending Club, you’ll need to have been in business for a year, have at least $50,000 in annual revenue, and  credit score of at least 620. Lending Club is tough to qualify for, so if your Lending Club loan is denied, try a shorter-term lender. 

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Kabbage vs. Lending Club

If you’re an established business and have a strong credit score, Lending Club will typically be a better option for you than Kabbage will.

Lending Club has the highest qualification standards, but the lowest rates of the Kabbage competitors.

However, Lending Club isn’t your best option if you need very fast funding. Unlike Kabbage, Lending Club typically has a minimum of a week long application process, and a longer underwriting process as well. If you need funds immediately, Kabbage or the other Kabbage alternatives will be a better choice for you.

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#5: Headway Capital

Headway Capital offers a truly revolving line of credit, providing a range of $5,000 to $50,000 in credit lines. The median Headway Capital line of credit is $21,000.

The terms once you draw from the funds are set between 12 and 24 months, with the median term being 20 months.

APRs can get expensive (as with all the Kabbage competitors), ranging from 40% to 80%. The median Headway interest rate is 52%.

Qualifying, however, is pretty easy. Headway Capital only requires a 500 minimum personal credit.

They’ll also work with businesses that are very young, as the required time in business is six months at a minimum. As for annual revenue, Headway Capital will want to see at least $50,000 or equivalent pacing. If you fund with a Headway Capital line of credit and withdraw funds, you’ll pay back these funds with either a weekly or monthly repayment schedule.

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Kabbage vs. Headway Capital

Both Headway and Kabbage have lax minimum credit requirements, but Headway will work with lower revenue and younger businesses, making it a good option if you’re just getting started and need a line of credit to fund growth.

The lowest APR with Headway, however, is still pretty high. If you’re a slightly more qualified borrower, you might be able to get a lower interest rate with Kabbage. It’s also important to note that Headway Capital charges at maximum a 2% draw fee on the amount drawn from you line each time. If you’re planning on tapping into your line of credit often, this draw fee can really add onto your APR.

One benefit of Headway, however, is that they tend to have more comfortable repayment schedules. The median term of 20 months is much longer than Kabbage’s, and you can pay back with either weekly or monthly repayments.

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How Does Kabbage Work?

Kabbage is an alternative, non-bank lender providing short-term lines of credit to small business owners who don’t typically qualify for traditional bank financing.

Compared to longer-time lines of credit that you might find at a bank, short-term lines of credit like Kabbage offers, are structured similarly but are different in a few key ways:

Kabbage lines of credit are smaller, paid back over a tighter time period, and come with much higher rates. Kabbage works with much less qualified borrowers that banks do, and the work over a much shortened time frame.

This means that borrowers with bad credit and relatively new businesses can get funding from Kabbage in just a few short days. But for the service of fast and accessible cash, Kabbage will charge higher interest rates.

As you’ve seen with our list of Kabbage competitors, the same goes for other companies like Kabbage, too—if they’re able to fund less-qualified borrowers and do so quickly, then they will likely charge higher interest rates.

The Details on Kabbage Lines of Credit

Now that you’ve got a general idea of how business loans like Kabbage and their competitors work, let’s dig a little into the details on how Kabbage lines of credit are structured to make sure you’ve got a solid understanding of what you’re measuring Kabbage competitors against:

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Interest Rates

As for that interest rate, Kabbage has a unique fixed fee they charge on the amount outstanding on your given pull, ranging from 1.5% to 10%.

For the first two months of repayment, your monthly fee is 1.5% to 10% of the total amount you borrowed (if your term is set to 6 months). If your repayment term is set to 12 months, you’ll pay the fee you’re quoted on the total amount borrowed for up to six months. For the remaining months (no matter what your loan term is), you pay a fee of 1% on the total amount you borrowed.

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Credit Limits

When you apply for Kabbage, you’ll get approved for a credit line of up to $150,000, but as small as $2,000. Once you’re funded, you can pull from your line of credit as often as once a day. And as with any line of credit product, Kabbage only charges you interest on the amount you draw from your credit line.

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Requirements

Kabbage is one of the easier online lenders to apply to and qualify with. In fact, Kabbage doesn’t set a minimum credit score you have to have to qualify. They’ll look at your personal credit score to determine what you qualify for. They won’t look at your business credit score.

Kabbage sets a minimum of $50,000 in annual revenue, and at least 12 months in business.

Beyond the typical qualifications for business financing, Kabbage will also consider the following: whether you have a minimum average bank balance of $2,500, past bankruptcies and whether they’re cleared, and the number of non-sufficient funds days in the last 90 days from applying.


Should You Seek Out a Kabbage Competitor?

Part of deciding whether to go with Kabbage or one of the top Kabbage competitors is to weigh their pros and cons.

So, what are the benefits and the downsides of working with Kabbage?

Here’s what you need to know.

Stick With Kabbage if You Need . . .

Let’s consider the advantages of funding with Kabbage over one of the top five Kabbage competitors.

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Fast Funding

Kabbage is certainly one of the best quick business lenders out there.

Your line of credit can be funded almost instantly, sometimes the same day you apply (depending on the details of your application).

Kabbage in part can operate so quickly because they use technology to underwrite your loan, and generally require a very few documents to apply. This means they have very few documents to process.

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Accessible Funding

In the world of small business lending, Kabbage is one of the most accessible players.

They don’t weigh your credit score as heavily as other lenders do. Plus, Kabbage looks at other business data to determine your eligibility. This gives Kabbage a more holistic look into the health of your business, unlike other Kabbage competitors. And in general, the more business accounts you can link to your application, the more business data and information Kabbage can use to underwrite your line of credit. This aspect of working with Kabbage might be appealing for borrowers who don’t qualify for more traditional business financing products.

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Flexible Funding

A line of credit in general is a great option for borrowers who need flexibility in their funding. With a line of credit, you’ll have a pool of funds in your back pocket, which you can tap into whenever you want or need to for your business. Kabbage especially gives you flexibility with how often you can draw from the funds—as much as once per day.

If you have cash flow issues, or run a seasonal business, a line of credit is an especially good option.

Go With a Kabbage Competitor If You Need . . .

Alternatively, you should lean towards funding with one of Kabbage’s competitors if you want to access any of the following advantages:

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Lower Rates

As Kabbage works with less qualified borrowers and funds applications over a very expedited time frame, they’ll charge higher rates on their lines of credit.

If you’re approved for a line of credit with a fee on the higher end of the spectrum, your APR can skyrocket up to over 100%.

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A Higher Credit Limit

As compared to other line of credit lenders (meaning longer term lenders and traditional bank lenders), Kabbage offers much smaller credit lines.

Kabbage only offers lines of credit for a maximum of $150,000, though most won’t qualify for the absolute maximum amount.

If you need a much larger cushion on your cash flow, you might want to go with one of the Kabbage alternatives listed below.

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To Build Credit

Lines of credit are typically a fantastic way to build personal and business credit. Using the line of credit responsibly—drawing and repaying what you owe on time—will help you establish good payment history.

Using a line of credit to build your credit will help you qualify for lower rate financing products down the road.

However, Kabbage doesn’t report to either the personal or business credit bureaus—meaning you won’t get credit for your responsible behavior on the credit line.


The Bottom Line on Kabbage Competitors

Kabbage offers a very easy-to-qualify for and fast line of credit product, but there are a long list of Kabbage competitors out there.

Your best option should always be the product that meets your business’s funding goals at the lowest rate possible.

So before you choose to work with Kabbage or even their competitors, be sure to compare each and every option to see where you can find the lowest rates and best terms.