Atlanta-based Kabbage provides advance capital to both online and offline small businesses. One of the advantages of its model is that the application process is fast - a business applies online and the decision is made quickly. The company offers advances in amounts ranging from $500 to $50,000, and charges a fee for the loan between 2% and 10%, depending on the length of the loan and other factors.
To reach these credit decisions, Kabbage doesn't rely solely on traditional credit models. Instead, it uses the wealth of data that's now available through a variety of means, including sales numbers, revenue figures from Quickbooks or Xero, data from Stripe, delivery data from UPS, and social media following.
Today, Kabbage has announced that it's using another source of data to make its decisions on advancing capital: Square transactional data. In a statement today, Kabbage said that it was the first company to underwrite funding based on that data.
"Millions of small businesses, from local dog groomers to wedding photographers, now have access to Kabbage funding simply by using Square to accept payments. Square gives these businesses the ability to get paid on the spot, while Kabbage enables them to get funding just as quickly," said Marc Gorlin, Chairman and Co-founder of Kabbage.
Kabbage has plenty of capital to provide that funding, too. Earlier this year, the company closed a $75 million credit facility, which came just a few months after the company raised $30 million in Series C financing. Among their investors are Peter Thomson’s Thomvest Ventures and the UPS Strategic Enterprise Fund.
