How to apply for a loan from Kabbage
You can apply for Cabbage Line of Credit online. First, you will need to create and log in to your Kabbage account. Then, you’ll 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, Cabbage loan will ask you to consent to a hard pull on your credit.
If Cabbage loan can verify your information, you should receive a decision almost immediately. If your application requires further review, it may take four to seven business days for you to receive a decision.
If you are approved for a Kabbage loan Line of Credit, you will receive a loan agreement that outlines your credit line amount, term length, and monthly fees. Kabbage will also provide a comparative APR to give you an idea of how much a line of credit will cost.
You must sign a personal guarantee as part of your kabbage loan agreement.
Keep in mind that when you draw on your line of credit, Kabbage loan has minimum withdrawal requirements based on the length of your term. For six-month terms, the minimum withdrawal amount is $500, for 12-month terms, the minimum is $10,000, and for 18-month terms, the minimum is $20,000.
What is an SBA loan?
The Small Business Administration (SBA) partners with select commercial lenders that agree to meet SBA guidelines for offering small business loans.
With the exception of the Disaster Loan Program, the SBA does not provide real business loans directly. Instead, the SBA provides a partial guarantee that if a business defaults on a loan payment they will pay a percentage of the loan to the lender.
Essentially, the SBA acts as a co-signer for small businesses that don’t have the credit history or other collateral to get a traditional loan. By reducing risk for lenders, the SBA helps encourage financial institutions to lend to small businesses. It gives small entrepreneurs and start-up businesses peace of mind with business financing options, which ultimately results in additional capital and cash flow.
How do SBA loans work?
Since SBA loans are bank loans, applications are submitted to the bank, and loan payments are made to the bank. The SBA’s involvement is limited to reviewing the loan application submitted by the bank and providing the bank with a written authorization outlining the terms of the SBA guarantee.
How can I use the proceeds of an SBA loan?
The SBA offers several loan programs designed for small businesses that may not qualify for a traditional bank or conventional loan. The most common SBA loan is the 7(a) General Business Loan Guarantee Program, which provides up to $5 million in working capital and is designed to help entrepreneurs or start-up businesses launch or expand their businesses. It is the most flexible loan option and can cover various business expenses including short and long term working capital and refinancing of existing business debt.
The SBA also offers these loans to help small businesses:
- SBA export loans finance fixed assets and working capital for businesses that plan to begin or continue exporting.
- CAPLine financing covers seasonal working capital.
- SBA 504 loans provide funding for assets such as new equipment or real estate.
- SBA disaster loans are available to repair or replace items damaged or destroyed in a declared disaster.
- Economic Injury Disaster Loans (EIDL) provide financial relief to businesses and nonprofit organizations that are currently experiencing a temporary loss of income.
- The SBA Microloan Program, the smallest loan program, provides loans of up to $50,000 to help small businesses start and expand.
- An SBA Express Loan is an easy way to get fast, amortized government-guaranteed financing for your small business. Borrowers can receive up to $350,000 in capital in the form of a term loan or line of credit.
- The Preferred Lender Program (PLP) is an SBA program where certain lenders are designated as preferred lenders with the authority to unilaterally approve SBA loans. The SBA typically provides loan guarantees to these lenders within 24 hours of their request.
- The amount of SBA funds you qualify for will vary depending on how much working capital your business needs. Your loan’s interest rate and repayment terms will depend on the actual SBA loan program you choose.
How do I get an SBA kabbage loan?
SBA financing programs vary based on the needs of the borrower. To apply for an SBA kabbageloan, you will need to collect personal and business information for your SBA loan application before visiting a participating lending institution. Lenders will require borrowers to provide extensive documentation in the kabbage loan package, including:
Personal background and financial statements
A resume for each principal
Business financial statements
Profit and loss statements
Income Tax Return
kabbage Loan application history
Estimated Financial Statements
Ownership and affiliations
Business Certificate/License
Business overview and history
Business Lease
The following assets can be used as collateral for an SBA kabbage loan guarantee:
Fixed assets such as immovable property/land and/or buildings
machinery and/or equipment
Warehouse receipts for marketable merchandise
A co-signer if you are unable to repay the kabbage loan
Accounts Receivable
Business owner savings accounts
Life Insurance Policies
Stocks/Bonds
Once your kabbage loan package is complete, your lender will submit it to the SBA for review.
Is an SBA Loan Right for My Business?
SBA endorsements increase the likelihood that small business owners can receive funding from traditional lenders. The working capital you get can be used to meet a variety of business needs.
However, the SBA loan program requires extensive time and documentation to get approved. In addition to the time needed to track statements for everything from your personal credit (including your credit score) and financial statements to your loan application history, the application and approval process can take up to three months.
Whether you need a short-term loan or long-term financing, online lenders can be a better option for getting working capital quickly.
Applying for funding with less than stellar credit
Having less than perfect credit is a reality for most Americans. And many times bad credit prevents us from reaching our full potential. However, as our economy has recently been bouncing back, bad credit doesn’t carry the stigma it once did. Where earlier it was basically impossible to get any kind of kabbage loan with bad credit, now bad creditors are not completely out of luck. They have to work a little harder to get the funds they need.
Having poor credit is a big hurdle when it comes to getting a kabbage loan because lenders don’t see you as a viable investment. In fact, they see you as a risk that could default. So, how hard is it to get a small business kabbage loan?
Although traditional lenders like banks and credit unions hold this idea very closely, there are many great options to make the kabbage loan application process friendly for all small business owners. Try these two:
Get a co-signer
You can try to get a loan from a bank even if you have bad credit only if you have someone to guarantee your kabbage loan. If you have a good friend or family member who really believes in your business, he or she can cosign your loan, essentially taking on the risk. You need to remember that if you are unable to repay your loan, the payments will fall on your co-signer and affect their credit as well.
Collateral
If you don’t want to burden any family or friends to co-sign your kabbage loan, you can always put up collateral to get approved. Some lenders are more likely to approve your loan if you can’t pay back your debt if you put up something valuable like your home. However, this is a very high risk.
When considering how to get a business loan with less than stellar credit, be very wary of payday kabbage loan and research loan options. Learn about all types of loan options available to you and learn the difference between secured and unsecured loans.
Going into it, you’ll have to work harder to get approved and expect to get higher interest rates than someone with great credit. It is also good to meet with all your financing options so that you are fully informed. Now that you understand the steps, it’s time to start looking for the right lender for your situation.