Businessmen and entrepreneurs today are spoilt for choices with the range of loan options for small businesses. Kabbage and Lending Club are two leading business financing lenders with their online model and less stringent eligibility requirements. So let’s look at how Kabbage Vs Lending Club fares.
What Kabbage Brings to the Table
Kabbage specializes in short term loans offered to small businesses as a line of credit. Any business that is 12 months or older is likely to qualify for these as well as those with bad credit.
Finance is available quickly but the maximum cap is set at $150,000 with loan terms usually between 6 to 12 months.
The APR is steep and can be anywhere between 20% and 80%. However, there is no minimum credit score requirement and all that is needed is that your minimum annual revenue be around $50,000.
What Lending Club Offers You
Lending Club offers long term business loans as well as line of credit with approval times of up to 10 days.
The maximum amount that can be borrowed is $300,000. While loan terms can be up to five years, the APR is reasonable between 7.77% and 35.11%. In order to qualify for a Lending Club loan, a credit score of 620 is essential as also a personal guarantee.
Your business has to be at least 24 months old with at least $75,000 in annual revenue. As a borrower, you must own at least 20% of the business and there should be no recent liens or bankruptcies associated with the business.
Which is Better For My Business?
The answers to the following will help you arrive at a decision on Kabbage Vs Lending Club for your small business:
Check to see which lender’s eligibility criteria your business wholly satisfies. This will include the years in business, the annual revenue of your business, and credit score levels required.
Based on these, Kabbage is suitable for a young business or one with poor credit scores. Lending Club, meanwhile, is ideal for a business with good credit scores and businesses looking to expand.
Kabbage is suitable for businesses seeking short-term loans quickly or wanting a line of credit. Lending Club would be a good choice for long term loans and businesses willing to wait a little longer. The wait can also result in lower APRs.
Amount required and purpose
The kind of money you are looking to raise will also be crucial to your decision. While Kabbage has a maximum cap of $150,000, this is set at $300,000 at Lending Club.
So, if you are looking for a small amount or line of credit to tide over a temporary cash crunch, then Kabbage will be your choice. Lending Club is preferable if you want to borrow a large amount intended for a one-time business investment such as opening a new branch or something similar.
Once you have made your choice in the Kabbage Vs Lending Club matter, take a close look at the associated terms and conditions before signing on the dotted line and making a commitment. Some things to watch out for are the possibility of voiding the loan, fees involved, and collateral requirements.