SnapCap vs. Kabbage 2020 Review
Online lending has made it easier than ever for business owners to apply and qualify for business financing. But with more and more online lending platforms appearing all the time—some more trustworthy than others—it’s so important to evaluate each platform’s offerings and reputation. SnapCap vs. Kabbage are just two of the many online lenders on which you need to do your due diligence.
Founded in 2008, Kabbage was among the first wave of online lenders. Since then, they’ve become one of the most reputable online lending platforms, and a go-to source for business owners seeking revolving lines of credit. On the other hand, SnapCap, which is owned by Lending Tree, was founded in 2012. They don’t have quite the same name recognition as Kabbage, and they’re not in Fundera’s carefully vetted lender network. That said, they can provide business owners with fast access to working capital at relatively affordable rates.
In this article, we’ll do a side-by-side comparison of SnapCap vs. Kabbage to see how their loan offerings, eligibility requirements, application process, and customer reviews stack up. We’ll also give you some advice about how to decide which (if either) of these lending platforms is a good fit for your financing needs.
Overview of the Two Lenders
Working capital, inventory, expansion, and equipment loans
Line of credit
$5,000 to $600,000
$2,000 to $250,000
3 to 36 months
6, 12, or 18 months
Factor rate of 1.05% to 1.4%
Interest rate of 1.5% to 10%
Automatic, fixed payments either daily or weekly
Automatic monthly payments
– One year in business
– 500 personal credit score
– $100,000 annual revenue
– One year in business
– $50,000 annual revenue (or $4,200 per month for the last three months)
The first things to consider about SnapCap vs. Kabbage are the types of loans each platform offers. To that end, we’ll also tell you about their loan terms, which includes length of repayment, repayment structure, rates and fees, and collateral requirements.
SnapCap Loan Terms
SnapCap lists four types of financing available through their platform: all-purpose working capital loans, inventory loans, expansion loans, and equipment loans. Their website does not list terms for each of these loan types. Rather, they provide this general framework for all of their credit products:
- Loan amounts: $5,000 to $600,000
- Term lengths: three to 36 months
- Payment structure: automatic, fixed payments either daily or weekly
SnapCap also doesn’t provide loan costs, as interest rates and fees vary depending on your business’s profile and the credit product you’re applying for. But according to our research, you can expect a factor rate of 1.05% to 1.4%. You may also be charged an origination fee of 2.5%, depending on the type of financing you’ve secured. Also, be aware that you may be charged other fees, like late payment fees and non-sufficient fund fees, which vary depending on your loan product.
SnapCap’s loans are unsecured, which means that they don’t require a specific type, amount, or value of collateral to secure. SnapCap doesn’t say whether their loans are backed by other means, but be aware that unsecured loans are typically secured with a general lien on your business’s assets.
Kabbage Loan Terms
Kabbage is much more transparent about their loan types and terms than SnapCap. This platform offers one credit product: a line of credit with the following terms:
- Loan amounts: up to $250,000
- Term lengths: six, 12, or 18 months
- Payment structure: automatic monthly payment
Rates for Kabbage’s line of credit vary from 1.5% to 10%, depending on the length of your term and other factors based on your business’s performance. Every month, you’ll pay an equal portion of the loan principal, plus the monthly fee if you have an outstanding balance (since it’s a line of credit, you’ll only pay interest on the funds you use).
Kabbage frontloads their fees for the first two months for their six-month line of credit, or the first six months for their 12-month line of credit, then rates will drop after that. Fees for their 18-month line of credit remain consistent over the entire term. Also note that Kabbage doesn’t impose prepayment penalties, so you can save on monthly fees if you’re able to pay early.
Kabbage automatically withdraws these payments from your bank account on a monthly basis, and they don’t attach any additional fees to their loans beyond that monthly payment. Also note that Kabbage doesn’t require specific collateral to secure their loans, but they will require a personal guarantee and, in some cases, will file a general lien on your business’s assets.
SnapCap vs. Kabbage: Loan Eligibility Requirements
Next, we’ll take a look at the minimum qualifications each platform requires in order for a business to be eligible for their loans.
SnapCap Minimum Loan Qualifications
To qualify for a SnapCap credit product, your business needs to meet the following requirements, at a minimum:
- Time in business: one year
- Personal credit score: 500
- Annual revenue: $100,000
In addition, you’ll need to be able to provide three months of business bank statements in order to apply for a loan. Also note that SnapCap can only provide financing for businesses that are based in the United States, and they can’t work with businesses with average bank balances under $1,000, or ones that have less than five unique deposits per month.
SnapCap lists the following as restricted industries, meaning that they can’t extend credit to these types of businesses:
- Flea markets
- Precious metal sales
- Manufactured/mobile home dealers
- Contracted management services
- Payroll companies
- Call centers and answering services
- Mailing and fulfillment houses
- Title companies/escrow agents
- Stenography and court reporters
- Travel agencies
- Vehicle manufacturing
- Video rental
- Blood and organ banks
- Online auctions
- Adult entertainment/materials
- Drug paraphernalia and dispensaries
- Horoscope/fortune telling
- Museums, zoos, historical sites
- Bail bonds
- Banks, credit unions, mortgage lenders
- Non-bank finance companies
- Money services businesses
- Collection agencies
- Debt and tax reduction services
- Investment consulting
- Lessors of real estate
Kabbage Minimum Loan Qualifications
Kabbage takes a holistic view of your business’s performance, so they don’t list a particular minimum credit score you need in order to be eligible for a loan. However, you will need to meet the following requirements:
- Time in business: one year
- Annual revenue: $50,000 (or $4,200 per month for the last three months)
Kabbage also requires that the business has a minimum bank balance of at least $2,500.
Kabbage lists the following as restricted industries:
- Financial institutions
- Nonprofit organizations
- Businesses that sell or manufacture any form of assault-style weapon/rifle and/or sell firearms or ammunition to individuals under 21
Also keep in mind that Kabbage can only work with businesses based in the U.S., and they won’t approve applicants who have large outstanding balances with other lenders. Business owners that have declared personal bankruptcy can be eligible for a Kabbage loan if at least one year has passed since discharge.
SnapCap vs. Kabbage: How to Apply
Here’s what to expect from each lender’s application process, including what you’ll need to provide on your application, and how long it takes to access your funds once approved.
SnapCap Application Process
Before you formally apply for a SnapCap loan, you’ll need to provide your business’s age, annual revenue, and your credit score. You’ll also need to provide some basic information about your business, like your industry, size, and your home and business address, as well as the loan type and amount you’re seeking.
If you pre-qualify, then you can move onto the official online application, where you’ll provide some more information about your business, plus your bank statements so they can evaluate your cash flow. They’ll also perform a soft credit pull to review your credit score and history.
If you qualify for a loan and accept SnapCap’s loan offer, they’ll deposit your loan funds into your bank account in as little as 24 hours. All told, SnapCap loan transactions typically take 24 to 48 hours.
Kabbage Application Process
To apply for a Kabbage loan, you’ll first need to create a Kabbage account by providing your email address and creating a password. From there, you’ll provide some basic information about your business, including your name, address and phone number, industry, and your EIN and social security number.
Then, you’ll be asked to sync up your business checking account, as well as several platforms your business uses so that Kabbage can review your business’s performance and financials. Some potential accounts you can connect include PayPal, eBay, Amazon, QuickBooks, Etsy, Xero, Stripe, and Sage (you’ll be asked to provide your login credentials for each account you sync up). From there, Kabbage’s algorithm will perform the underwriting process within minutes.
If you qualify, you’ll receive a loan offer instantly; and if you decide to take your loan offer, you can choose whether you’d like your loan funds to be deposited into your PayPal account or your business checking account. If you choose the former, funds can be deposited instantly, or up to three days for the latter. However, this process can take longer for larger loans or if Kabbage has trouble verifying and underwriting your business. Providing as many synced accounts as possible is one way to avoid delaying the process—the more information they have about your business, the more thoroughly they can evaluate your eligibility. Also, note that Kabbage will perform a hard credit inquiry once you’ve accepted your loan.
From there, you can pull funds from your line of credit immediately, up to once per day, using either the Kabbage dashboard or mobile app.
SnapCap vs. Kabbage: Customer Reviews
Finally, we’ll give you a quick overview of what customers have to say about each platform.
SnapCap Customer Reviews
SnapCap’s customer reviews are fairly mixed on review platforms: They receive two out of five stars on Yelp, four out of five stars on Merchant Maverick, and three out of five stars on Better Business Bureau, to name a few (though they have an A+ BBB rating).
On the positive end, customers are happy with the ease, efficiency, and speed of SnapCap’s application and funding process. They also noted the friendliness and professionalism of SnapCap’s loan advisors. But on the negative side, customers criticized SnapCap’s super-high APRs, performing unauthorized hard credit pulls, and unsatisfactory customer service.
Kabbage Customer Reviews
Overall, Kabbage’s customer reviews are mainly positive: They have four stars on Merchant Maverick, five stars on TrustPilot, and just under five stars on Better Business Bureau, where they have an A+ rating, but they’ve fetched just two-and-a-half stars on Consumer Affairs.
Customers are impressed with how fast, easy, and streamlined Kabbage’s application and funding process is, and many praise the specific loan advisors they worked with. Among the less positive reviews, some customers noted that the algorithm had trouble verifying their business, some had issues with their customer service team, and many others were unhappy with Kabbage’s high interest rates.
SnapCap vs. Kabbage: Which Lender Is Right for You?
The clearest difference between SnapCap vs. Kabbage is that Kabbage only offers lines of credit. Lines of credit are flexible forms of financing that can be used for so many projects—think purchasing inventory, launching a marketing campaign, or to use as working capital—but they might not be the right choice if you need to fund a larger, one-time project. On the other hand, SnapCap’s financing can be applied toward myriad use cases, like purchasing equipment or opening a new location.
But if you are looking for a line of credit, Kabbage is one of the most reputable lenders you can find. Their interest rates can become expensive, true; and, on the whole, SnapCap can offer lower rates for well-qualified borrowers. But Kabbage is much more transparent about their loan terms and costs than SnapCap is—which, to us, is a sign of a more trustworthy lending platform overall. SnapCap’s daily remittance schedule may prove too intensive for certain businesses, as well.
Ultimately, it’s up to you to decide whether Kabbage or SnapCap is the right choice for your business. Also, remember that SnapCap and Kabbage are certainly not your only options. You can always look into our recommended online lenders to see if they’re a better fit.