Read the full article at: www.forbes.com
Traditional banks can take weeks to process your loan application only to tell you in the end you’ve been rejected. Now Kabbage, one of the growing number of alternative lenders, lets you easily apply for your loan online. It makes quick assessment of your creditworthiness, and if approved, the money is instantly available to you.
Kabbage offers borrowers lines of credit for as much as $100,000, with loans payable over six months. The average line of credit is $25,000, while the average borrower takes seven to eight loans a year.
What’s Kabbage’s secret? For one, it has a very low loan default rate. It targets established businesses rather than startups, and assesses three factors: capacity to repay, character, and the consistency or stability of the business. Loans are as likely to be repaid as those of traditional banks.
Kabbage is transparent about the costs of their loans, with rates range from 1.5% to 20% for the first two months. But, while APR is a consideration, most small businesses are focused on the return they get from the loan. They see a big opportunity, and they need money to make money, so they take out a loan in order to grow.
“Banks still aren’t making enough small-business loans, so Kabbage is quickly filling the void–at crazy high interest rates.”