Kabbage for Online Credit Advances
From serving online merchants, alternative lender Kabbage has ambitions to grow deeper into small business credit, says chief financial officer Simon Yoo.
For the moment, Kabbage Inc. is only a blip on the radar screen of banks that specialize in small business banking. The Atlanta-based alternative online lender, three years old and funded by venture capital, currently has about 100,000 customer accounts and $200 million in annualized credit advance volume. It is one of several startup lenders that have recently been moving into the small business space as banks retreated in the wake of the financial crisis, a list that includes borro Ltd., Multifunding, Biz2Credit, Lighter Capital and On Deck Capital.
Kabbage’s particular niche is extending credit advances, ranging from about $500 to $50,000, to merchants who sell products on online exchanges such as eBay, Amazon and Yahoo and need cash to buy inventory. The company’s proprietary decisioning software utilizes the customer’s sales data from such exchanges, as well as from PayPal and shipper UPS and the customer’s social media activity, to render a verdict on a credit request within as little as seven minutes.
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