Kabbage is a company which makes finance available to online retailers based on their eBay sales and PayPal receipts, as well as taking their social media profiles into account. Since their launch two years ago in the States they’ve extended more advances to small businesses than any other provider of working capital.
Rob Frohwein, Kabbage Co-Founder and CEO compares the UK bank lending situation with the US saying: “The UK is Europe’s largest ecommerce market but small businesses there face the same challenge that American businesses face — banks are hesitant to lend the capital so desperately needed. Given the size and demand of the UK market, it was the natural destination for our first launch overseas“.
The question has to be asked is there room for yet another finance company specialising in lending to eBay businesses and online traders. Already lending in the UK (in order of launch) are iwoca, Ezbob and capexpand. The truth is that the banks simply aren’t lending. The government is doing everything they can to stimulate borrowing but the banks aren’t playing ball, hence the government allocating £100 million to non-bank groups to help ease the problems of SME lending.
As well as the demand from small businesses, Kabbage also brings more choice to eBay sellers for finance, whilst some of their competitors will use Amazon to increase the amount they lend, Kabbage uses eBay, PayPal and social media profiles to assess credit worthiness, offer 10 month loans, and deposit funds in your PayPal account in as little as seven minutes from loan application.
Kabbage have already extended more than 50,000 individual advances to small businesses in the States with annualised demand rocketing more than tenfold from $20 million just 12 months ago to $200 million today.
Kabbage have also just been named as one of the top 10 Most Innovative Finance Companies in the world by Fast Company magazine. They’re fourth on the list, two ahead of our friends at PayPal!