Small business loans
Kabbage announces UK launch at Finovate EU
Kabbage is a company which makes finance available to online retailers based on their eBay sales and PayPal receipts, as well as taking their social media profiles into account. Since their launch two years ago in the States they’ve extended more advances to small businesses than any other provider of working capital.
Rob Frohwein, Kabbage Co-Founder and CEO compares the UK bank lending situation with the US saying: “The UK is Europe’s largest ecommerce market but small businesses there face the same challenge that American businesses face — banks are hesitant to lend the capital so desperately needed. Given the size and demand of the UK market, it was the natural destination for our first launch overseas“.
The question has to be asked is there room for yet another finance company specialising in lending to eBay businesses and online traders. Already lending in the UK (in order of launch) are iwoca, Ezbob and capexpand. The truth is that the banks simply aren’t lending. The government is doing everything they can to stimulate borrowing but the banks aren’t playing ball, hence the government allocating £100 million to non-bank groups to help ease the problems of SME lending.
As well as the demand from small businesses, Kabbage also brings more choice to eBay sellers for finance, whilst some of their competitors will use Amazon to increase the amount they lend, Kabbage uses eBay, PayPal and social media profiles to assess credit worthiness, offer 10 month loans, and deposit funds in your PayPal account in as little as seven minutes from loan application.
Kabbage have already extended more than 50,000 individual advances to small businesses in the States with annualised demand rocketing more than tenfold from $20 million just 12 months ago to $200 million today.
Kabbage have also just been named as one of the top 10 Most Innovative Finance Companies in the world by Fast Company magazine. They’re fourth on the list, two ahead of our friends at PayPal!
great news the more there is the better competition can only be good to keep rates sensible, they may even sponser another geek fest
it astonishes us why paypal their self don’t get into this type of lending
PayPal tried offering loans… but from what I hear on the grapevine they only offered money to retailers that didn’t need finance.
It was for “Selected” retailers which generally excluded smaller merchants who wanted small loans so totally missed the mark.
out of curiosity we filled in the form.
we got an offer of a £100 thats “one hundred” loan would increased
to a possible £300 on good payment record,
this on a £500k a year turnover ebay account?
you would need to be Microsoft to borrow anything meaningful
Must have been your ‘social media profile’ that swung it?
Noted the massive £100 Loan. But what was the interest on that loans? Fair and Reasonable or in the realm of “Payday Loans” 1,000 plus % APR?
The more competition and sources of money for getting short term working capital the better for any online business that is growing strongly and needs the finance.
These guys look to be eating the Banks breakfast, lunch & dinner already.
However I bet Paypal are watching this market very closely indeed…..
I think they misspelt their name not “cab,,,,,” but “Gar,,,,”. 71% APR…come on. If it looks like a turd, smells like a turd, then it is a turd.
There is nothing wrong with the banks. They are still lending…switch off the TV and the BBC news and go speak to them with a business plan in hand…
Actually there is plenty wrong with the Banks and if you have the time to trundle round the High Street with your ‘business plan’ good luck with that.
We prefer to spend time running our business and making money!
Banks are fine if you have the time and want capital for a major investment which justifies the time involved.
These guys are simply focussed on providing short term cash usually for working capital (i.e. stock purchase) which is a major issue for many online businesses at various times.
If you don’t like the APR then go elsewhere and see if you can get a rolling overdraft for £20k or more from your Bank and then check the APR.
Good luck as you will need it.
I grew my business to over £1m thanks to the investment from my bank. No luck was needed. Sound business acumen and a track record of success is usually sufficient. We don’t need overdrafts, but if I did need one, 10k is already offered after 3 years of careful trading.
Banks support success. Too many people get upset when they don’t lend, as they don’t lend to prop up failing businesses.
I know these short term loans can be attractive, due to the speed of acquiring the money. However if the stock you buy does not sell [quickly], you are in severe danger of eating up your profits. I have an issue with the ease of supply advertised. The reality is never the same. I would always advise any business to have a well researched business plan – this after all is the blue print for your business, and a cashflow forecast. A dashboard of key KPIs that are monitored on a weekly basis is mandatory.
The society we live in is too focused on easy credit from faceless companies. Look at the scandal with payday loans. Sorry, but 71% APR is not an attractive proposition. Thanks but no thanks.
anyone who uses this sort of financef for 20k needs help
All help gratefully received!
I presume the cheque is in the post as usual?