Small businesses are in constant need of funding and support. In an effort to increase available loans to service this need, Kabbage is in the process of raising over $500 million in “fixed-rate, asset-backed notes”. According to Techcrunch, this money will be used “to expand the amount, payback terms and size of loans it makes to SMBs over the next three years.”
Kabbage is a billion dollar company specializing in small business lending. Founded in 2009, the fin tech company has loaned over $2.7 billion since its creation. The $500+ million in loan backing comes at a critical time following OnDeck’s recently record
loss. “The startup makes revenues on fees around the loans, and last year saw its direct lending business turn profitable in Q4, with the whole business expected to be profitable in the second half of this year.”
The key to small business lending for organizations like Kabbage is repayment. The more consistent people repay their debt the more Kabbage can lend. This straight forward but crucial concept is important for future small businesses moving forward.
As a small business owner, I appreciate the support from fin tech companies like Kabbage and hope that the organization continues to grow and offer more funding products. There is absolutely a need for the industry both today and in the future.