Founded in 2009 by Rob Frohwein, Marc Gorlin, and Kathryn Petralia, Kabbage provides small businesses with a convenient funding source.
“Think about restaurants, dry cleaners, retailers, car washes, landscape professionals,” Frohwein says. “One of the things most precious to a small business owner is time. They’re focused on their craft. There’s very little time to manage the business.”
Raising capital through traditional channels can be challenging. Instead of visiting multiple banks only to be repeatedly denied, or partnering with outside investors who demand equity stakes, small businesses can upload account information such as QuickBooks, PayPal, shipping data, and more to Kabbage. Computer algorithms then instantly calculate an appropriate line of credit up to $250,000.
To be eligible, a business must generate at least $50,000 in revenue for a year (or be projected to reach that mark based on the previous three months).
“What’s really differentiated us is to make the process totally automated, make it incredibly fast, and to allow the small-business owners to get back to doing what they do best,” Frohwein explains.
Once approved, small businesses can draw on their credit lines, immediately accessing a six- or 12-month installment loan issued by Celtic Bank. Kabbage also works with struggling customers, which has kept bad debt low.
Kabbage has attracted more than 150,000 clients, making available more than $5 billion in capital. “We’re 1,000 percent focused on providing small businesses with working capital, helping them to grow,” adds Frohwein.
The fintech company plans to expand into payment processing as well, giving their clients access to broader ranges of payment types and customer bases that would usually be available only to larger operations. “Small business has become our passion,” Frohwein says.
This article originally appeared in our November 2018 issue.