If you’re interested in getting business funding from Kabbage, if you’d like to see the entire Credit Line application process, I just went through this myself. You can APPLY HERE to get a $50 gift card upon approval as well as feel good knowing you are helping me earn $250 for referring you!
I will show you how the entire inside of it works and get my Kabbage Business Credit Line Application approved because that’s the kind of thing I’d like to know. I’d like to know the whole application process and how much you can get approved for what the interest rates are.
I’ll show you all that inside, because that’s what I do, I make stuff that I’d like to see myself.
Kabbage has Credit Line for businesses that on the basics are available for 6-month terms or 12-month terms.
Long story short, the interest rate that I’m seeing is about 10% or so over 6 months, meaning if you turn that into an APR, it’s around 20% or so which in my opinion is pretty good.
If you’re going to borrow money for your business, you should have a plan to make more than 10% back on it.
Here is the Kabbage Business Credit Line Application process from start to finish.
If you’re wondering what I’m using this for, I’m building an online education and freelancing platform named Uthena, I’m paying freelancers to make video courses for me, which I then have a Partner Program at Jerry Banfield.com/partners where I sell the ability to access all the courses I make, and use them for Private Label Rights.
So here we go. I imagine, I’ve talked to my most trusted friends on this and the consensus seems to be that there’s no way with the approach you’re using that if you borrow money now there’s no way in the long term, you should lose money based on the value you are creating.
I think it’s really important beforehand to consider when you are thinking about borrowing money, for your business that you’ve got a really clear plan to not just repay it, assuming people are just going to give you money, but to create true value.
What I’m doing is helping people earn money working online, everything I’m paying is going out to other actual people, it’s not going to any big companies, which is fine. If it is, well, all the money I’m spending out right now is going back to other people to pay other people to work online, that’s creating true value in terms of a job.
All of us are working together to make more videos just like this on many different subjects. And to package them and online courses and sell them, if you’re just borrowing money, you’re not creating true value. To me, that’s a waste of everyone’s time and energy.
So make sure you’re creating true value before you go get this money because one of the worst things you can do is apply and get loans and then waste that money on something that doesn’t make true value.
I also think it’s important to consider the worst case scenarios. If you borrow the money and you can’t repay it back for me. I’ll just keep borrowing until either the money is coming in from the value created or I declare bankruptcy.
Say then, this is one of the basic worst-case scenarios.
Let’s look at the bankruptcy one real quick.
If for some reason all of this blows up and nothing works to make any money. I’ve helped other people work online and I’ve given them a lot of free educational content. I’ve helped people learn and advance their careers and I’ve helped other people have money to live their lives and work online.
That’s the worst case scenario and then I declare bankruptcy and need to operate in cash for 10 years. That’s not a big deal. My wife can help me and I’ll work a little bit too.
You see, that’s the worst case scenario right here thus, I’m very comfortable that I’ve faced it honestly, I imagine the odds of that happening are almost zero but that’s the basic worst fear there.
Thus it’s important that if you’ve got some fears about borrowing money for your business, consider, look at them, look at —Well, how bad is it really really look at that don’t just borrow money without facing those fears you might have with borrowing money and borrowing money is not bad either.
The first step of the Kabbage Credit Line Application process
I put the stuff I thought was most important to you first, this is the step of that application process step one you want your business information first, then you fill in your email you put in your password.
I recommend some kind of Password Manager a password system, make sure you use all different passwords for stuff because if one password falls on one website, which is fairly common, the whole rest of your business and your personal life don’t fall like dominoes because you use the same one everywhere
I do not use the same password anywhere. So if one falls nothing else is at risk.
Put a password in there and have it keep it securely somewhere then you’ve got your business name and business address these, this should be pretty straightforward.
Next page of this we go over to Step 2.
You got it here: Business Information, Industry Type, Company Structure, Date Established and Annual Revenue.
Just do your best to pick one that’s relevant. For me this is always interesting because there’s so many different possibilities and sometimes I just go through and pick the best one.
Mine is the sole proprietorship and/or single-member LLC, depending on how you are looking at it.
At the state level I have a single member LLC, but according to the federal government, they don’t care that I have an LLC for tax filing purposes. I am putting all of my business income directly into my own personal taxes, which means that’s the sole proprietorship, as far as the IRS’s concerned, even if technically I have a disregarded entity name.
To get this Kabbage business credit line loan, one of the key factors is Date Established, mine is October 2011, which looks good.
I’ve been in business long enough to not go out of business.
At least half of businesses fail within the first five years, especially non franchise businesses like mine -- that’s not a franchise, for example, it’s something, a McDonald’s for example, a Yogurt Shop, that’s a franchise.
You buy a packaged business system that is given to you completely often is very expensive. If you don’t run it successfully, you go out pretty quickly.
But for non franchise businesses often the failure rate is really high. Thus, if one of the things for keeping your business and getting credit is simply staying in business. Loans can help you stay in business. But loans can also help you get out of business as well, especially borrowing a lot of money relative to your annual revenue.
That means that I took in last year’s 2018 total amount of money my business made, copied and pasted that in there for me, that was 236,000 or so total annual revenue.
Now that’s before any expenses. That doesn’t count anything I spend money on, that’s not profit, that’s just your essentially gross sales numbers.
I’m just doing my best to give you all this in a Down to Earth straight format. You can always research any of this further yourself, of course.
What’s cool is Kabbage has the ability to do an automated financial review and these are getting to be pretty common.
What you need on this is some kind of business bank account, I recommend you get a business bank account that has good online banking, and then you sync it here, do not sync your personal information to this.
It allows you to sync directly to your bank and you need all your business stuff in your own account. That way you can keep everything on track.
Once you’ve got that set up as I have, then it is a simple matter of synching the bank account and the Kabbage Business Credit Line system automated system has the ability to look right away at your income from there.
If you just start your business up, you may not have it yet, that’s one of the first key things to get is to get your business bank account.
If you get to this point and realize you don’t even have business bank account, you should probably not be applying for a line of credit, you need to get a business bank account where you can track all your sales in there because for borrowing any money doing all of your accounting primarily for doing your accounting, it’s a lot easier to have a business bank account, because all of your transactions between a business bank account and a business credit card can easily and automatically be tracked in something like QuickBooks self-employed.
Step four, you do your personal information.
These loans and lines of credit are often backed by a personal guarantee, instead of putting collateral up like your car or your house directly. It’s backed by a personal guarantee that if your business goes under, you will pay for it yourself.
Make sure to read those terms on it, maybe even better than I did. I just assume with my sole proprietor business, any money I bought from my business, especially the way the personal information goes, there’s a high likelihood that a credit there could have an expectation or a reasonable desire to, if I can’t repay it as a business to ask me for it personally, which makes total sense.
For example, if my business went under, and then I got a regular job, the creditor that I brought my business loans forward, I imagine want to have a piece of whatever income I was making in a regular job.
That’s definitely a worst-case scenario for me.
Alright, so can you fill out your personal information, your home address, and your social security number? —Yes, you do, you need a social security number at this point.
You’ll need your primary phone and a date of birth here. Be prepared to submit all of this in order to get the funding. I’d like to know that stuff up front, which is why I’ve put it here for you.
Once you’ve got this up here. Then what you do is you will go through and submit the application, you will see the verifying your identity reviewing your data, analyzing your business health on this screen.
On the next screen, you will get your line of credit “Congratulations!”…
…or you may get a rejection “You are not approved for any credit with us”…
It probably won’t say that. But it might say something else like “we are going to further review your application or at this time, you are not eligible for credit with Kabbage“.
Mine, which kind of makes sense after seven and a half years of business and hundreds of thousands in revenue, they are kind enough to offer me $7,700 without any more questions asked.
What’s cool about a credit line and a credit line means that it’s kind of like a credit card, except instead of a credit card, it’s essentially a cash advance.
If you have credit cards, a cash advance is often a lot higher than whatever the interest rate on the card is itself.
This is essentially… you could look at it as a cash advance credit line.
This is $7,700 that can be dropped into my bank account whenever I ask for it.
What’s nice about having a credit line for especially what I’m doing, I’ve got enough credit and enough cash right now I just like to have a credit line in case I need some more cash at some point and then I can just draw that and put that in the bank.
Thus, a credit line is ideal. If you don’t need a whole bunch of money at once. You just might need some money in the future and you might need it in cash, instead of on a credit card.
These are the complete terms I was given for the loan.
Originally, as they offer and then they’ve since offered a loan with a higher amount, we’ll look into that for a minute.
At first I kind of looked at this, I was like —Oh god, that’s a high interest rate— But I’ve thought about it more. And especially as I’ve considered it in the context of a cash advance and compared the rate for this versus a cash advance on a credit card. This is pretty good.
That means they’ll give me $7,700. They all want back as 10% more than was given, and that’s a pretty good interest rate over a 6-month period.
Technically, since the payments, whenever I applied for this, the first payment wasn’t for a month or so that essentially means it’s really repaid over about a seven month period since payment.
So the first payment a month from whenever you get it approximately right now technically, it’d be even more than a month from where I’m at now is a pretty good deal 10% of interest, you just pay back what you bought plus $770 over a period of 6-months.
Now if you’d like the most updated version of this, I’ll go through and follow their advice. If you look over at one of their screens, it says it recommends connecting all of your different accounts to get even more updated terms.
If we look at my updated terms, I’ve connected my other accounts like my stripe and my paypal, and a couple of others and over the last month since I applied for this, the loan amount has increased to $11,200.
These are the same standard terms for this Credit Line as before, essentially 10%.
Now, since it’s been another month, my first payment won’t be until May 25, which would give me an extra 10 days to make the repayment then
- What I would do is make the first two payments of $2,146.67
- Then there are the remaining four payments at $2,006.
In about six months and 10 days or so I would have repaid all of this and it would have cost me $1,120 to borrow the $11,200, which is a pretty good deal.
You can also do the 12-month term but the interest rate on it is a lot higher.
Now, if you just do a little, doubling real quick.
-- If you notice for the 12 months the fee is $4,000.
-- On the 6-month term, the fees are $1,100.
You’ll notice for a term that’s twice as long, the fees are almost four times as much. So, don’t need money for 12-months, instead of 6-months
You’ll notice the first 6 months, the interest is really high to start with, if you want the 12 month term that’s 4.75% for 6 months, and then 1.25% for the rest.
So you get a lot better repayment terms on the 1.25% and the 2.50% for the 6-month term here versus the 12-month plan which is 4.75% and 1.25% after the fists 6 months.
I guess somebody’s sweating it a lot more fear, taking longer to repay it and you want to repay it in 12 months and six months
The cool thing is they update this based on the automated data for me, I make some more sales, the amount of the loan might go up more. But ironically, the more sales I make, I might not even want to be alone anymore.
The easiest way to borrow money is to have money already and not need it. Isn’t that ironic?
Thank you very much for reading this Kabbage Business Credit Line Application post showing you how this whole process works, including interest rates.
I imagine if you found this helpful and you’ve read it all the way to the end, you will leave a like on the video because that will help me a lot with my channel.
I love you. You’re awesome. Thanks for reading today and I’ll see you again