Kabbage Funding will provide credit lines between $1,000 and $150,000 backed by Kabbage’s parent company, American Express, and will not charge any application, origination, annual or monthly maintenance fees in an effort to simplify the process of seeking working capital.
Small companies that have been in business for at least a year will be able to apply for the lines online, with Kabbage saying the product will enable small businesses to access working capital 24/7 to help manage cash flow.
Approved businesses will have the option to choose a six-, 12- or 18-month loan term, are eligible to take out more than one loan at a time up to their approved amount, and can choose to settle their loan early with no pre-payment penalties.
“Most small business owners start a company to pursue a passion, not to spend time managing their cash flow and balancing their books,” Kabbage Co-Founder and Senior Vice President at American Express Rob Frohwein stated in the release.
“Our suite of digital cash flow solutions is designed to give small business owners back time in their day, and Kabbage Funding offers convenient funding whenever they need it.”
Kabbage Funding’s launch is another step in AmEx’s ongoing plans to garner SMB market share and become an essential partner through its cash flow management suite. The product joins Kabbage Checking (launched in June) and Kabbage Payments (public launch next year), as the company’s newest offerings aimed at small business cash flow.
All of these products are intended to work together through the Kabbage digital cash flow platform, which enables small businesses to borrow funds, make deposits, earn 1.1% APY on checking balances and pay vendors through a single provider, according to the release.
American Express also recently targeted SMBs with the launch of its AmEx Business Checking product, the first ever debit option released by the card provider.
Acquired in August 2020, Kabbage has been one of AmEx’s most noteworthy companies in the past year. The company was one of the largest lenders in the COVID-prompted Paycheck Protection Program (PPP), giving out $7 billion in 2020, according to PYMNTS.
The company was recently called on by the House Select Subcommittee on the Coronavirus to document their fraud and compliance systems and revenue earned from PPP loans. The probe is ongoing, with the request not signaling wrongdoing at this point.
In other recent fintech news, the Consumer Financial Protection Bureau (CFPB) issued a final ruling that will progress financial institutions away from the LIBOR index rate for consumer financial products. Hummingbird also raised a $30 million Series B led by Battery Ventures to modernize risk and compliance systems in anti-money laundering UX.