Originally published on Technorati as: Business Funding for Web 2.0 and Beyond
How great would it be to secure business funding for your online venture? If getting your hands on some quick “cabbage” would help your Internet business, innovative Kabbage.com may offer the perfect solution.
Get Green and Keep Growing with Kabbage
A Web-based cash advance service, Kabbage funds small businesses that sell goods online, particularly on platforms such as Etsy, eBay, and Amazon. Not to be confused with a “loan,” a Kabbage cash advance has helped thousands of online business owners keep succeeding. It’s a great funding source for help purchasing more inventory, supplies or advertising. You can also use your infusion of fresh cabbage to pay employees, contractors, and outsourced help. Similarly, the company recognizes that although an online business processes orders and sales online, there’s still a need for extra cash, to handle offline expenses. Simply put, Kabbage throws many small online businesses the lifeline they need to thrive.
Launched in late 2010, Kabbage exclusively funds U.S.-based online sellers. If you ask about business funding for a bricks-and-mortar initiative, they won’t approve the request.
Lettuce Get Kabbage Without Hassles
Interestingly – and conveniently – Kabbage delivers the cash advance to your PayPal account. Once approved, they send the money quickly, too – often in less than 10 minutes! If you don’t have a PayPal account, they’ll deposit to your checking account. The money becomes accessible in one to three days, max.
Decisions are based on your online sales volume, customer satisfaction ratings, and credit scores. The company stresses, though, that a credit score alone isn’t their ultimate deciding factor. A decent track record of sales and healthy customer reviews carry weight.
Innovative Kabbage, Plowing the Future for Online Businesses
A diverse group of online sellers have received Kabbage cash thus far. Among them: a cowboy boot restoration company and an e-commerce site that sells cosmetics for professional models. So far, over 4,000 Internet businesses have been served, with many of them approved for online business funding more than once.
What makes Kabbage a business model whose time has come is that it fills a crucial void created by the banking system. Banks don’t understand the needs of e-commerce business owners. In a recent article in Forbes, Marc Gorlin, co-founder and chairman at Kabbage stated, “We’re seeing really unquenchable thirst to get working capital, they’re not being serviced by sources at banks. (Banks) don’t understand the data around their businesses.” That, or they simply don’t value most small online businesses. Banks ask for collateral and years of business history, documentation that most online businesses and particularly those using Amazon, eBay or Etsy have, either because they are new or just don’t have the “right documents”. The Small Business Administration, another traditional source for small business funding, also has rules, regulations and requirements that aren’t ideal for the kind of fast funding an online merchant might need.
Unlike the small business loan approval process with a large, bureaucratic bank, Kabbage moves at the speed of the Internet.
With Kabbage, Payback Is a Cinch
The company doesn’t exactly reveal the maximum amount of “cabbage” they advance small businesses. They only say that it varies, depending on your sales volume and how long you’ve been in operating.
What is made clear, though, is that Kabbage works with business owners on repayment. You have up to six months to repay the cash advance, making payments via PayPal or your checking account. You can pay-off the cash advance by making monthly payments, at a minimum rate of one-sixth the amount you received. Also, you’ll owe a flat fee of $100 at the end of your first 30 days.
If you need some cabbage fast, Kabbage.com aims to help. And it seems to be entering with good timing, particularly since many banks have turned more small business-unfriendly than ever.