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Kabbage could be the best lending option for the next phase of your biz

(FINANCE NEWS) Kabbage offers lines of credit between $2,000 and $100,000 for small businesses, even Realtors. Ready to hire more support team members but need some aid? Check this out.

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Thinking outside the lending box

If you are a business owner, you know how tedious it can be finding feasible banking options. Depending on your financial history, financial need, and current financial state, it can take months before not only finding the right bank or lending option, but to be accepted as a client. We know the pain, and decided to find the best alternative lending option for small business lines of credit.

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Why alternative lending instead of big bank?

Alternative lending companies aren’t typically as strict as big name banks, and therefore have higher acceptance rates. The leniency from alternative lending companies is great for small businesses with financial dings or questionable credit history. Alternative lending also offers benefits such as quicker approval times, more flexibility, and less paperwork.

Alternative lending options

There are a dozen alternative lending options that have gained popularity over the years, such as Lending Club and OnDeck. While you should definitely take a look before deciding, after extensive research and our own personal experiences with debt, we suggest Kabbage as an excellent option for small business in financial need.

Kabbage immediately separates itself from other options with its application and approval process that takes the headache out of “sign up”.

Instead of a lengthy underwriting process that has to be done in person, Kabbage’s application is done completely online, and has an almost instant approval process if requirements are met.

Small businesses must have been in business for at least a year, and earn at least $4,200 in mostly revenue. Monthly revenue, transaction volume, and credit score are also deciding factors.

Finding the proper paperwork takes a large chunk of time in itself, which is why Kabbage offers its users the option to save time by linking the application to a business checking account or online banking service such as PayPal instead.

Once linked, Kabbage will review the data to determine loan eligibility. Compatible banks and online services include: Chase, Bank of America, Wells Fargo, PNC, U.S. Bank, Regions, BB&T, TD Bank, USAA, Citibank, Capital One, SunTrust, Navy Federal, BBVA Compass, Fifth Third Bank, PayPal, Authorize.Net, Stripe, Sage, Square, eBay, Shopify, Yahoo, Amazon, Etsy, and Intuit.

FYI: Kabbage also looks at personal credit score, which should be at least above 550.

Loan terms

Kabbage offers lines of credit between $2,000 and $100,000, and functions more as a credit card than a traditional loan. For example, if you are approved for a $100,000 line of credit but only use $20,000, you only pay fees on the $20,000. Users can also draw money against their line of credit as often as once a day.

The fees mentioned above range anywhere from 1.5 to 12 percent of the loan amount for the first two months on a six month loan, or six months on a 12 month loan. There is a standard one percent fee for remaining months. Outside of these monthly fees, there are no added costs for a line of credit, which is another reason we suggest Kabbage. Most of the other lenders we researched had additional fees.

It is also important for small businesses to note Kabbage does not enforce any limitations on how the loan is used. Inventory, design, marketing, or whatever you decide to spend it on, is your prerogative. This is in contrast to other lending companies, who want to know explicit plans about how the money is to be spent before approval.

The catch

Although we like Kabbage overall, it is our responsibility to tell you about the things we don’t like. The biggest complaint we have is the limited amount of time small businesses have to repay their loan.

While there is a 12 month option, which is still not a lot of time, the only other option is six months.

So for small businesses with financial needs that span longer than a 12 month repayment term, Kabbage may not be the right solution.

Don’t take our word for it…

As stated in the beginning, there are a dozen other options for alternative lending, along with traditional lending options. And although we appreciate you taking our word for it, applying for the wrong loan can make a bad financial situation worse. So please be sure to research your different choices, keeping your specific needs and goals in mind.

If the decision is too tough on your own, consult with an accountant or financial expert to find the best option for you and your small business.

#Kabbage

Lauren Flanigan is a Staff Writer at The American Genius, hailing from the windy hills of Cincinnati, with a degree in Marketing from the University of Cincinnati. She has escaped the hills, and currently resides in Atlanta, where you can almost always find her camping at a Starbucks strategizing on how to take over the world.

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Business Finance

Under-representation of women in fintech: Let’s talk about it

(BUSINESS FINANCE) Representation of women in fintech remains scarce despite a prevalent population of interest. Why is this the case, and what can we do about it?

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Woman reading a document in front of her computer, one of the women in fintech.

Women are 50% of the population – so why are there only 9 of us on the 2020 Forbes Fintech 50?

I’m personally shocked by how underrepresented women are in such a lucrative industry. By 2022, it’s predicted that fintech, or financial tech, will be worth $26.5 trillion, and we cannot afford to miss out.

And I’m serious when I say fintech is truly taking over. This includes payment processing, online and mobile banking, person-to-person payments (think Venmo or Cash App), financial software, to name a few. For some perspective, half of consumers use digital banking services as the primary way to manage their money. That’s a big deal.

So why does it matter that women are drastically underrepresented in leading roles at these companies?

  • Women CEOs receive only 2.7% of all VC funding – that is astonishingly low, considering that the remaining 97.3% is secured by their male counterparts.
  • While a study conducted by the Harvard Business Review on leadership skills found that women scored higher than men in 17 out of 19 categories (I could’ve told you that), women founders make up only 17% of fintech companies. Some of the categories tested on were:
    • Bold leadership
    • Taking initiative
    • Resilience
    • High integrity & honesty
    • Collaboration and teamwork (this is a big one!)
    • Inspiring & motivating others

If you’re a woman interested in business, tech, or entrepreneurship looking to break into the big leagues, here’s some exclusive advice from lady CEOs, founders, and COOs:

  • Stay Passionate
    Suneera Madhani, Founder + CEO of Fattmerchant, says: “…remember why you started and hold that close to your heart when times get tough.”
  • Be Open to Learning
    “Never behave as the smartest person in the room because you may miss some of the best ideas.” Says Snejina, Co-founder + CEO of Insurify.
  • Trust Your Intuition
    As the Founder + CEO of Tala, Shivani Siroya urges us to: “Stay excited, focused on results and be incredibly optimist. It’s okay to really believe in your gut – just make sure that you see the results with it.”

2021 is a new year full of opportunity – even though the odds are (and always have been) stacked against us, let’s have this be the year where women techies and business owners capitalize on their leadership skills. We have lost time – and profit – to account for.

Author’s Note: Thank you to CreditRepair for the linked infographic!

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Business Finance

TikTok users are making bank by copying Congress peoples’ investments

(FINANCE) TikTok, the short-form video platform, has users trading stocks tips. The newest strategy: following Congress peoples’ stock moves.

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TikTok isn’t just for funny dances, crude jokes, and kids born after the year 2000 (but crazy to think, they aren’t kids anymore, they could be 21…time flies). The short-form video platform that soared to be the #1 most downloaded app during the pandemic is giving tips to youngsters and millennials for their finances. The newest strategy: following and copying Congress’ stock moves.

This is in part to the not-so-surprising news of insider trading among politicians and the ability to duplicate trades of another user on platforms such as Iris, whose website says…

“Invest together with your family, friends, and brilliant people all over the world. Get real-time notifications when others make trades and copy their moves.”

Nancy Pelosi and her husband, Paul, are the prime examples of government traders (or traitors, you decide) to watch. For example, Paul made $5.3 million through call options to buy 4,000 shares of Alphabet before the House Judiciary Committee voted on antitrust regulations. He also exercised $1.95 million worth of Microsoft stock just 2 weeks prior to the company’s awarded contract worth $22 billion for the use of their VR headsets in military training. Lastly, before President Joe Biden announced another incentive program for EV manufacturers, he also paid Tesla stock options for $1 million.

Nancy Pelosi at the podium.

Christopher Johns, the cofounder of Iris, said that every trade “inevitably turned out to be such a long-term winner.” Wonder how that’s possible (eye roll). He adds, “if they’re the ones passing the laws, it’s probably smart to keep up and see what they’re buying.”

And yes, their stock picks are considered public trading activity and this is perfectly legal. Trading is no longer a lone man in a dark room behind 3 large computer screens of graphs or Jim Cramer screaming in the background- it’s a full-on social activity, just like everything else nowadays.

There is a whole community behind these meme cryptos, penny stocks, and short squeezes. You’ll find them on r/wallstreetbets, Elon Musk’s Twitter, Facebook groups, and of course, trading TikTok, all contributing to the “Eat the Rich” scheme of Gamestop/AMC, the elaborate rise and fall of Dogecoin, and the now trending, 2nd dog-specific coin, Shiba Inu.

Laugh all you want, but these kids are working smarter, not harder, and even outsmarting the best in the league, by following the best in the league.

AMC, Gamestop, and Dogecoin.

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Business Finance

Mastercard partners with Bakkt to offer crypto services to its vast network

(FINANCE) The thousands of banks and millions of merchants on the Mastercard network could soon integrate cryptocurrency in their products and purchases

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Man holding Mastercard

Mastercard has announced a partnership set to change the financial industry forever.

The major payments network is teaming up with Bakkt, a crypto-focused firm spun off of Intercontinental Exchange, that would be the provider of custodial services for users that sign up. This means that the thousands of banks and millions of merchants on Mastercard’s network could soon integrate cryptocurrency in their products and purchases. Bitcoin wallets, cards that earn rewards in crypto, and loyalty programs like airline travel or hotel points that convert to bitcoin would be included. The benefit is that the rewards or points in the form of crypto will allow users to earn a yield. Bakkt CEO Gavin Michael said in an interview,

“It’s an easy way to get going because you’re not using cash, you’re putting something that’s an idle asset sitting on your balance sheet, and we’re allowing you to put it to work.”

cryptocurrency

With Mastercard being a dominant force in the global payments industry alongside Visa, and 2.8 billion Mastercards in use, the announcement could bring a noteworthy expansion to how Americans interact with bitcoin and other cryptocurrencies. Sherri Haymond, the executive vice president of digital partnerships says,

“Our partners, be they banks, fintechs, or merchants, can offer their customer the ability to buy, sell, and hold cryptocurrency through an integration with the Bakkt platform.”

The development of crypto, and bitcoin in particular, has dramatically increased in just the last year. Bitcoin has reached the record price of $60k this month and U.S. regulators have now allowed bitcoin-linked ETFs.

In a U.S. Consumer Crypto survey by Bakkt consisting of 2,000 consumers, 48% said that they purchased some form of crypto in the first half of 2021. 32% that had not yet purchased crypto reported that they were heavily interested in purchasing by EOY.

According to the Mastercard New Payments Index, 77% of millennials stated their interest in learning more about crypto while 75% said that they would put it to use if they could understand it better.

“We want to offer all of our partners the ability to more easily add crypto services to whatever it is they’re doing.”

Cryptocurrency on top of US dollar.

And just announced, due to the popularity and interest in cryptocurrencies in the Asia Pacific, consumers and businesses there will have the ability to apply for crypto-linked Mastercard credit, debit, or prepaid cards allowing them to convert their crypto into traditional currency to use globally. Mastercard is partnering with Amber Group, Bitkub in Thailand, and CoinJar in Australia to offer this service. Be on the lookout for the rollout of these services in the States soon!

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