Kabbage Sees More Mobile Lending, Women and Minority Owned Businesses Seeking Funds
Online lending platform Kabbage says it sees more mobile lending, more women and minority owned businesses seeking loans and more businesses from rural and lower to middle income communities too.
Small Business Trends connected with Kathryn Petralia, president of Kabbage, to learn more about its core offering and other steps it’s taken to add value to entrepreneurs. Today 140,000 small businesses use Kabbage, which was launched in 2009 by Petralia and Rob Frohwein. Today, Kabbage has delivered over $4.5 billion in funding, moving the loan process from long lines at a physical bank to a shorter wait on mobile or the web.
Small Business Trends: I think most folks in 2018 know you’re not a bank, but how else is Kabbage different? Tell us something that’s unique but not front and center, but still important.
Kathryn Petralia: Data is a big differentiator for us. Across our 140,000+ customers, we have more than 2 million live data connections with our customers. It gives us the unique ability to provide a readily-available and real-time line of credit that dynamically matches business performance.
In addition, we offer businesses the option to apply, qualify and draw funds entirely through a mobile app. Our complementary Kabbage Card puts the purchasing power of a small business line of credit in the wallet of every customer with no annual fee, allowing customers to make daily purchases at any point of sale, whether online or in-store. Kabbage is also unique in that we license our technology to global banks, providing them more reach to serve their small business customers in a meaningful, cost-effective way.
Small Business Trends: So a more broad question for you, and maybe it’s just my observations but I see tons of entrepreneurs using personal savings to keep their business going. Why does this happen? I wouldn’t want to be in their shoes.
Kathryn Petralia: If a business needs less than $250,000 in credit, it’s hard to get a traditional loan. A bank’s costs to underwrite a $50,000 loan or $5,000,000 loan are the same, which understandably turns the banks’ focus to larger customers. This pushes many small businesses to unfavorable options like credit card debt or personal savings to fuel their business.
Read the full article on Small Business Trends here.