Kabbage Paycheck Protection Program Small Business Loans: Review

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  • Fintech company Cabbage has partnered with banks, who are SBA-approved lenders, to provide automatic loans to small businesses from the Paycheck Protection Program (PPP).
  • You don’t have to be an existing one Cabbage Requesting Clients to Make Kabbage a Resource if you are struggling to get approved for a PPP loan by your bank.
  • Although small businesses can obtain PPP loans of up to $ 10 million, Kabbage only processes loans of up to $ 2 million.
  • If you apply online, Cabbage will tell you if your company is eligible for a PPP loan and how much you can get.
  • Click Here To Apply For Government Relief Through The Paycheck Protection Program »

Cabbage is a financial technology company providing automated loans to small businesses and consumers. The company has shifted its focus to personal income protection (PPP) loans to help small businesses struggling amid the coronavirus outbreak.

Update from July 2, 2020: Previously, the deadline for applying for a PPP loan was June 30th at 11:59 p.m. ET. On July 1, the House of Representatives passed a bill Extend the deadline to August 8th. The extension will be official when President Trump signs the law.

Banks have been inundated with applications for PPP loans since the passage of the CARES Act, causing excessive demands on lenders. In order to slow down the application process, banks are imposing stricter guidelines on applicants and making the process more difficult. Kabbage steps in as a resource for small businesses struggling to obtain PPP loans.

Kabbage has partnered with banks that are technology friendly and authorized Small Business Administration lenders. Forbes reported that there are several affiliate lenders, including Cross River Bank and Client Bank. These partnerships allow borrowers to access PPP loans online relatively quickly.

Should You Use Cabbage?

Cabbage is ideal for small business owners who are eligible for PPP loans but are having difficulty obtaining them through their banks.

Not all institutions are yet approved to offer PPP loans, and many approved banks only do so for existing customers. Others put even stricter restrictions on who can apply. If these restrictions prevented you from applying for a loan, Kabbage could be a solution.

The platform is also useful for businesses that don’t need more than $ 2 million. Although CARES laws allow lenders to provide PPP loans up to $ 10 million or 2.5 times their average monthly salary, Cabbage can only handle loans of $ 2 million or less.

The Benefits of Applying for a PPP Loan Through Kabbage

You can apply even if you are not a current applicant Cabbage customer

Many banks are so overwhelmed with PPP loan applications that they limit applications to existing customers. This makes it difficult to get a loan if your bank doesn’t offer PPP loans – you can’t just apply to another bank.

Your bank may offer PPP loans, but you are still having trouble applying. Even if, for example, companies with fewer than 500 employees are entitled to PPP loans, Wells Fargo has capped its credit to companies with fewer than 50 employees because they quickly run out of funds. Bank of America is accused Preferential treatment for applicants who have already granted loans about those who have personal accounts.

Kabbage is open to all eligible companies. So you can turn to if your bank is either unable to help or is making it difficult for you to apply.

You can quickly get approved for a PPP loan

If you submit your application online, Cabbage can tell you in minutes if your company is eligible for a PPP loan and how much money you have approved.

You can apply for the funds as soon as you have been approved for a loan. A representative from Kabbage told Business Insider that Kabbage will transfer the funds to your bank account within five business days of your request.

The Cons of Applying for a PPP Loan Through Kabbage

You can only receive up to $ 2 million

Under CARES, small businesses can get the lesser of $ 10 million or 2.5 times their average monthly paycheck. However, Cabbage is only able to process loans of $ 2 million or less.

Since you are limited to a PPP loan, you cannot get a loan through Kabbage and then apply for additional funding from another bank. However, you can apply through Kabbage and another lender before opting for a loan.

It is still possible that you will run out of money

As with any other lender Cabbage cannot guarantee that you will be approved for a loan until that money is used up – something that already happened to the initial $ 349 billion allocated to the program. Small businesses can apply for PPP loans until Aug. 8 if Trump approves the deadline extension bill. However, you should apply as early as possible to increase your chances of getting a loan.

How to Use Kabbage to Get a PPP Loan

Gather the necessary information before you begin Kabbage’s Application process. Kabbage says all applicants should be prepared with:

  • Business start date
  • Government-issued ID (front and back)
  • Monthly payroll report
  • Bank account and sort code

And possibly their:

  • Health insurance payment verification
  • Proof of retirement benefits
  • Declaration on the Economic Injury Disaster Loan (EIDL)

The rest of the materials you will need, which will differ depending on whether you are a sole trader / self-employed or salaried / nonprofit, are listed on the Kabbage website.

When you visit Kabbage’s PPP Loans Page, click “Apply Now” to begin the process. After submitting your information, Kabbage will let you know if your company is eligible for a PPP loan and how much money you can get. If you choose to accept the loan, you can provide your bank account details and accept the money via direct deposit.

You don’t pay any fees to apply for a PPP loan through Kabbage. The SBA requires lenders to compensate agents like Kabbage so that Kabbage makes its money from its partner banks, not customers.

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