Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business Finance

Kabbage offers capital advances to entrepreneurs

Entrepreneurs have many options for procuring investments, but Kabbage is a new option that offers entrepreneurs capital advances based on interesting criteria.

kabbage

Kabbage: cash gets your business moving

Convincing anyone to give you an advance payment, especially a financial services institution, is an uphill battle. Traditional lenders are already becoming stricter on who they give funding to, and there are usually a lot of required steps that companies have to go through before they receive capital. Kabbage, a company that provides capital advances to businesses seeking funding, hopes to make it easier for entrepreneurs to access the money they need in order to increase revenues.

As business owners start to make their Kabbage profiles, the site will ask them for information including the channels in which its products are sold as well as proof of past revenues. Interested applicants must use Ebay, Shopify, Amazon, Yahoo or Etsy in order to qualify for funding from Kabbage, and the more marketplaces they operate in, the larger amount of capital they are eligible to receive.

The site also looks at a business’s social media presence and customer engagement initiatives as those with a stronger social media plan are likely having more frequent conversations with customers, which can lead to increased sales.

How Kabbage funding works

After inputting this information, Kabbage lets you know how much capital you are eligible to receive, and from there, interested applicants can opt to receive funding. A cash advance is typically given with a 6-month payment timeline, and the amount owed each month is equal to the monthly payment plus a small percentage of the amount advanced – usually around 1-7 percent depending on the company’s revenues and Kabbage score. There’s no penalty for paying off the amount owed early, and unlike a loan, users of the site don’t pay accrued interest or other financing costs.

Advertisement. Scroll to continue reading.

If all goes according to plan, business owners take the advance, invest into high-growth areas of their business and then take resulting profits to pay back the amount owed. The Kabbage platform seeks to establish a relationship with innovative business leaders by fronting needed capital that will allow them to make aggressive investments that will result in pronounced growth in the market.

From that, entrepreneurs benefit from having a reliable source of capital should they ever need it, and have the potential to be awarded lower rates than if they were to take out a loan from a traditional financial services institution.

Destiny Bennett is a journalist who has earned double communications' degrees in Journalism and Public Relations, as well as a certification in Business from The University of Texas at Austin. She has written stories for AustinWoman Magazine as well as various University of Texas publications and enjoys the art of telling a story. Her interests include finance, technology, social media...and watching HGTV religiously.

1 Comment

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business Entrepreneur

Whether ill with COVID or in need of a vacation, it can feel impossible to take time off as a business owner - here...

Opinion Editorials

(EDITORIAL) Following your passion can create success, though it may not be financial. So should you really just "do what you love" and have...

Business Entrepreneur

(ENTREPRENEUR) Whether your project is an app or an art installation, there are innumerable speed bumps you can either hit or avoid - let's...

Business Finance

(FINANCE) Many choose to freelance in order to escape the daily grind of working for an hourly wage. Why, then, should a freelancer charge...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.