Checking Account

The Kabbage Business Checking Account Review 2021

A checking account is a bank or credit account that allows you to access your money for your day-to-day expenditure. Such accounts have no restrictions on when you should withdraw your money, although your bank may have daily withdrawal limits. The Kabbage business checking account is one of the best checking accounts that is available nationwide. The checking account is still a new product since it was launched in July 2020.

Despite being new in the market, Kabbage business account is offering competitive products in the market. The account has no monthly fees whatsoever. Moreover, it offers you unlimited fee-free transactions that earn a competitive interest rate. If you are a small business person who wants to manage their business financial activities effectively, Kabbage is the way to go.

A Kabbage business account is an online account that you can manage over an app or the web. Online accounts are convenient since you do not need to travel to a branch to do 123. You only need a smartphone or computer, and you are good to go. The best thing about online accounts is that they save a lot of time that you could have wasted when queuing at a branch.

What is Kabbage?

Kabbage is an online financial company that has headquarters in Atlanta, Georgia. The institution provides funding to small businesses and consumers through an automated lending platform. It offers free online checking account no opening deposit no credit check and savings accounts to businesses that have already been established.

The company was founded by Kathryn Petralia, Rob Frohwein, and Marc Gorlin. It started its operations in 2008. Currently, Kabbage is owned by American Express.

Kabbage operations were severely interrupted by Covid 19 pandemic, whereby they stopped lending since people’s businesses became unstable. It was therefore risky for the company to lend money to unstable businesses.

What is the importance of a business account?

You can get a checking account from a bank or a credit union. The best credit unions for personal loans have low interest rates on loans, and so do banks.

Having a business account for your business is very important. First of all, a business account helps you track your business expenses better and keep more accurate books. That avoids the confusion of mixing your personal expenses with that of your business.

Additionally, when you have a business account, your business looks professional. When a customer is making a payment, they can see the seriousness in it. Furthermore, a business account allows you to accept credit card payments.

Again, a business account ensures that any limited liability you receive via the legal entity you’ve registered is valid. Also, a business account is an excellent indicator to the IRS that you run a legitimate business and not just a joke.

How to open a Kabbage business account

Kabbage business checking account

Similar to when opening a no credit check credit union account, Kabbage does not check your credit history when opening an account, except when you apply for a loan. For you to get approval for a Kabbage business checking account, you must have been in business for at least one year. Also, your business should have a post annual revenue of $50,000 to get a line of credit of up to $100,000.

You may also qualify for a larger line of credit if your business has operated for at least three years and has $500,000 in annual revenue. The good thing with the business account is that you will get a 1.10% APY on balances up to $100,000. Another benefit of Kabbage is the power of American Express, which gives you a broader set of cash flow management tools for your businesses.

All in all, you require documents just as you would when opening a business account with other financial institutions. They include the following.

1) Sole Proprietor requirements

If you run the business as a single operator, you need the following documents.

  • Social security number (SSN) or the Employer Identification Number (EIN)
  • Personal identification (passport or driver’s license)
  • Business license with both the name of the business plus the business owner’s name(s)
  • Certificate of assumed name/DBA
  • Monthly credit card revenue (for merchant accounts)

2) Partnership business account requirements

  • Employer Identification Number (EIN)
  • Personal identification
  • Business license
  • Certificate of assumed name/DBA
  • Partnership agreement containing the name of the business and its partners
  • Monthly credit card revenue (for merchant accounts)
  • Organizing document filed with your state (for limited partnerships or limited liability partnerships)

3) Limited Liability Company (LLC) requirements

  • EIN
  • Certificate of assumed name/DBA
  • Personal identification
  • Business license
  • LLC operating agreement containing the name of the business and its partners
  • Monthly credit card revenue (for merchant accounts)
  • Articles of organization

You can visit the Kabbage business account sign-up page to sign up for a Kabbage business account with American Express or enter your details in the field provided. You will start by entering your email address and password (8 characters, 1 upper case, 1 lowercase, and 1 number), tick the box to agree on the terms and conditions, and then hit sign up.

Next, enter your full names and hit continue. A page will open where you will need to enter your mobile phone number to receive a code. You will also get further directives on what to do next. Also, you will need to upload all the required documents for verification.

Why should I consider a Kabbage Business Checking Account?

Various advantages come with the Kabbage business account. They include the following.

  • Opening the account is straightforward.
  • There is no minimum deposit requirement.
  • You can transfer funds and make payments anytime and anywhere.
  • The account has no monthly maintenance fees, nor does it have any minimum transaction requirements or any minimum balance fees.
  • You get a great interest rate of 1.10% annual percentage yield (APY).
  • Easy management of your money.
  • It has FDIC insurance. FDIC insurance ensures that your funds remain safe even when the institution collapses. Credit unions have insurance from NCUA. That is one of the major differences between banks and credit unions.
  • Easy-access debit card with no ATM fees, mobile banking, and online banking

Which loan can I get from Kabbage?

Since businesses grow when you take loans, there are various loans that you can benefit from once you open a Kabbage business checking account. You can easily get a small business line of credit from Kabbage Funding and grow your enterprise to greater heights.

When you get small business financing, you get the business assets and cash flow freedom to focus on other issues about your business. Kabbage Funding has various lines of credit which cover cases such as;

  • Upfront funding to buy inventory and other business needs
  • Equipment financing to purchase new equipment
  • Smooth cash flow or cover payroll
  • Funds in advance to offset unsettled customer invoices
  • Hire more workers with working capital
  • Launch a marketing campaign

The following are the types of loans you can get from Kabbage.

1) Unsecured small business loans

If your business has good credit scores, you can easily get a loan from the institution. That means you can pay your loan without issues. Some of the unsecured loans you can get include the following.

i) Business Line of Credit

A business line of credit is almost similar to a credit card. You get the chance to borrow up to a specific limit. When you borrow, your limit goes down, but your limit goes up again when you pay. A line of credit allows you to keep your business running if you do not have enough money in your business account.

Kabbage can establish a line of credit for your business even if you do not have an established line of credit. You need to produce your business information, bank account details, and personal information to apply.

ii) Working Capital Loans

Working capital refers to the cash available for the day-to-day expenses to run your business. It is also known as operating capital. With cash flow, you can cover marketing campaigns, payroll, inventory, and any other financial expenses that occur within your business’s daily operations. Sometimes you may lack adequate working capital, and that is where Kabbage’s working capital loan comes in.

iii) Professional Loans

If you are a professional with a business such as CPA, doctors, and attorneys, among other professionals, then you may require a professional loan to boost your business.

iv) Commercial Loans

A Commercial loan is any loan extended to a business instead of a consumer or individual. If you do not have enough working capital, you may consider a commercial loan to get started. Commercial loans can be short-term (30 days to one year) or long-term (15 to 30 years).

v) Short Term Business Loans

Short-term loans help your business to meet immediate financing requirements such as bridging gaps in cash flow, addressing unexpected needs for extra funding, and incorporating new business opportunities.

vi) Inventory Loans

If you run short of your business inventory, then all you need is an inventory loan to push you along. The inventory loan gives you some working capital to keep you going.

2) Secured small business loans

A secured loan is the one that a lender puts collateral to get it. In case you fail to pay, the lender can sell the collateral to get their money. There are various secured business loans which include the following.

a) Equipment Loans

An equipment loan gives you a working capital to purchase equipment to keep your business running.

b) Merchant cash advance

When you receive a merchant cash advance loan, your business gets upfront working capital in exchange for a percentage of your future credit card sales.

Other secured business loans include Factoring loans and Sba loans.

3) Industry-specific loans

These are loans that target a specific industry. Such loans help you to cover expenses relevant to your industry. Industry-specific loans at Kabbage include the following;

  • Retail Loans
  • Restaurant Loans
  • Auto Repair Loans
  • Trucking Loans
  • Beauty Salon Loans
  • Pawn Shop Loans
  • Construction Loans
  • Medical Dental Loans
  • Wholesale Loans

4) Minority loans

The loans help minority small business owners as well as minority entrepreneurs to fund their business operations right from purchasing technology to buying inventory. They include;

  • Loans for women
  • Loans for veterans

Bottom line

Kabbage is one of the best online financial companies giving great support to small businesses. The company, whose headquarters are in Atlanta, Georgia, in the US, started its operations in 2008. It offers both business and checking accounts to small businesses. Business accounts help to separate personal expenses from your business expenditures. Opening an account with Kabbage is easy since you can carry out the process online.

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