Business Funding for Web 2.0 and Beyond - Page 2
What makes Kabbage a business model whose time has come is that it fills a crucial void created by the banking system. Banks don't understand the needs of e-commerce business owners. In a recent article in Forbes, Marc Gorlin, co-founder and chairman at Kabbage stated, "We're seeing really unquenchable thirst to get working capital, they're not being serviced by sources at banks. (Banks) don't understand the data around their businesses." That, or they simply don't value most small online businesses. Banks ask for collateral and years of business history, documentation that most online businesses and particularly those using Amazon, eBay or Etsy have, either because they are new or just don't have the "right documents". The Small Business Administration, another traditional source for small business funding, also has rules, regulations and requirements that aren't ideal for the kind of fast funding an online merchant might need.
Unlike the small business loan approval process with a large, bureaucratic bank, Kabbage moves at the speed of the Internet.
With Kabbage, Payback Is a Cinch
The company doesn't exactly reveal the maximum amount of "cabbage" they advance small businesses. They only say that it varies, depending on your sales volume and how long you've been in operating.
What is made clear, though, is that Kabbage works with business owners on repayment. You have up to six months to repay the cash advance, making payments via PayPal or your checking account. You can pay-off the cash advance by making monthly payments, at a minimum rate of one-sixth the amount you received. Also, you'll owe a flat fee of $100 at the end of your first 30 days.
If you need some cabbage fast, Kabbage.com aims to help. And it seems to be entering with good timing, particularly since many banks have turned more small business-unfriendly than ever.
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