Kabbage Funding’s lending programs are currently on pause. You can sign up on Kabbage’s website to find out when they will resume lending. In the meantime, the move leaves business owners in need of a solid line of credit searching for other lending options.
The good news: Plenty of Kabbage competitors are still lending. We’ve compiled a guide to the five best Kabbage alternatives out there and broken down how they stack up against Kabbage’s previous line of credit offering.
The Top 5 Kabbage Competitors
Kabbage may have stopped accepting new applications, but several of their competitors are still helping small-business owners in need of funding. 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.
Lines of credit with OnDeck range from $6,000 to $100,000. OnDeck only offers a repayment period of six months once you draw from the line, and at 23.9% to 56.9%, their APRs are around as expensive as Kabbage Funding’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
Kabbage vs. OnDeck
While OnDeck offers a very similar product to Kabbage Funding, there are some notable differences.
First, OnDeck’s maximum line of credit is smaller than what’s available with Kabbage Funding and OnDeck only offers a six-month repayment period, whereas Kabbage Funding offers 12 months for some borrowers.
Kabbage Funding has a unique fee structure (more on that below) that sets itself apart from all of the Kabbage competitors. OnDeck uses a traditional interest rate structure. And while the interest rate you qualify for is totally dependent on your eligibility as a borrower, OnDeck’s APR range has a lower maximum APR than Kabbage Funding.
OnDeck sets 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.
Check out our full comparison guide to Kabbage vs. OnDeck.
Fundbox is another top Kabbage alternative.
Fundbox offers a business line of credit, similar to the one offered by Kabbage, as well as small-business term loans (only available for select borrowers).
Business owners need a credit score of at least 600 and be in business for at least six months to qualify for a term loan or business line of credit with Fundbox.
Kabbage vs. Fundbox
How does Kabbage compare with Fundbox? Kabbage offers lines of credit up to $250,000, whereas Fundbox will only dole out up to $100,000 at a time.
But if you’re a startup with under a year in business and you don’t quite reach Kabbage Funding’s minimum annual revenue requirement ($50,000), Fundbox might be the best Kabbage alternative for you.
Check out our complete guide to Kabbage vs. Fundbox.
BlueVine also offers a line of credit similar to Kabbage’s line of credit.
BlueVine offers $5,100 to $250,000 in line of credit amounts, repaid weekly or monthly over six or 12 months. The interest rate for BlueVine’s line of credit starts at 15%.
To qualify for BlueVine’s line of credit product, you’ll need a personal credit score of at least 650, monthly revenue of at least $30,000, and at least two years in business under your belt.
Kabbage vs. BlueVine
BlueVine and Kabbage Funding both offer lines of credit up to $250,000 and up to a 12-month repayment period, depending on the terms.
But BlueVine has a higher bar to qualify—650 personal credit score and two years in business compared with one year and no minimum credit score requirement for Kabbage Funding.
#4: Accion Opportunity Fund
Opportunity Fund joined forces with Accion, another microlender, to offer small-business term loans of up to $100,000 with interest rates starting at 5.99%. The nonprofit lender also offers coaching and mentoring for business owners.
You need at least 12 months in business and an annual revenue of at least $50,000 to qualify for a business loan. But Accion Opportunity Fund doesn’t have a minimum credit score to qualify, making it a good option for business owners who have a low credit score or minimal credit history.
Kabbage vs. Accion Opportunity Fund
Accion Opportunity Fund offers term loans rather than lines of credit, but there are some common features and requirements to Kabbage.
Most notably: Both lenders cater to businesses with a challenged credit history. Time in business and revenue requirements are the same for Kabbage and Accion Opportunity Fund (12 months and $50,000).
Kabbage lines of credit offered a wider range of loans—as small as $2,500 and as large as $250,000while Opportunity Fund’s lending ranges from $5,000 to $100,000.
While Kabbage offered fixed repayment terms of six or 12 months, Opportunity Fund customizes repayment terms based on your business needs.
#5: Headway Capital
Headway Capital offers a truly revolving line of credit, providing a range of $5,000 to $100,000 in credit lines. Once you draw from the funds, repayment terms are set at 12, 18, or 24 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 works with businesses that have at least one year in operation. As for annual revenue, Headway Capital requires 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.
Kabbage vs. Headway Capital
Kabbage and Headway Capital have similar standards to qualify, including relatively lax minimum credit requirements.The lowest APR with Headway is still pretty high, though, and more qualified borrowers might get a lower interest rate with Kabbage Funding.
It’s also important to note that Headway Capital charges a draw fee of up to 2% of the amount drawn each time you dip into your line of credit. That can really add up if you tap into your line of credit often.
One benefit of Headway, however, is that they tend to have more comfortable repayment schedules. The maximum term of 24 months is much longer than Kabbage’s, and you can pay back with either weekly or monthly repayments.
How Does Kabbage Funding Work?
Kabbage Funding 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 Funding offers, are structured similarly but are different in a few key ways:
Kabbage Funding lines of credit are smaller, paid back over a tighter time period, and come with much higher rates. Kabbage Funding works with much less qualified borrowers than 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 Funding in just a few short days. But for the service of fast and accessible cash, Kabbage Funding 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 Funding Lines of Credit
Now that you’ve got a general idea of how business loans like Kabbage Funding and their competitors work, let’s dig a little into the details on how Kabbage Funding lines of credit are structured to make sure you’ve got a solid understanding of what you’re measuring Kabbage competitors against:
As for that interest rate, Kabbage Funding 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 six 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.
When you apply for Kabbage Funding, 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 Funding only charges you interest on the amount you draw from your credit line.
Kabbage Funding is one of the easier online lenders to apply to and qualify with. In fact, Kabbage Funding 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 Funding sets a minimum of $50,000 in annual revenue, and at least 12 months in business.
Beyond the typical qualifications for business financing, Kabbage Funding 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 Funding 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 Funding?
Here’s what you need to know.
Stick With Kabbage Funding if You Need . . .
Let’s consider the advantages of funding with Kabbage Funding over one of the top five Kabbage competitors.
Kabbage Funding 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 Funding 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.
In the world of small business lending, Kabbage Funding is one of the most accessible players.
They don’t weigh your credit score as heavily as other lenders do. Plus, Kabbage Funding looks at other business data to determine your eligibility. This gives Kabbage Funding 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 Funding can use to underwrite your line of credit. This aspect of working with Kabbage Funding might be appealing for borrowers who don’t qualify for more traditional business financing products.
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 Funding 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:
As Kabbage Funding 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%.
A Higher Credit Limit
As compared to other line of credit lenders (meaning longer term lenders and traditional bank lenders), Kabbage Funding offers much smaller credit lines.
Kabbage Funding 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.
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 Funding 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
Kabbage Funding 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 Funding or even their competitors, be sure to compare each and every option to see where you can find the lowest rates and best terms.