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Kabbage Alternatives | The Best There Are

Chris Grundy
Aug 10, 2018

Kabbage alternatives – By 2025, according to Charles Moldow from Foundation Capital,$1 trillion in loans will be originated globally. If this prediction is accurate, it will create a huge opportunity for non-traditional sources of financing. The combination of big data scoring and new distribution channels allows startups to enter a field traditionally dominated by banks and governments. Especially since the 2008 financial crisis stopped banks lending to small businesses, alternative financing platforms, like Kabbage, have become hugely popular. A fast application process and almost instant approval have helped hold a flame to the shortcomings of banks and traditional sources of financing.

Also, since the worldwide scale of bank lending is so enormous, the reduction of banking activities even by a few percentage points, has created and opened a significant market for fintech startups.

If you keep reading this Kabbage Alternatives article you will get a broader overview about loan companies, which one to choose and why. Let’s get this started ;)

Kabbage overview

As a business owner, you are most likely familiar with Kabbage – a leader in the small business lending industry. As of today, the company have provided over $2 billion (!) in funding to more than 84,000 businesses. It is clear that the company has done a really good job of providing small businesses with funding. However, in my opinion it is a really good option only for medium-sized companies, located in the US, looking for a larger loan over a relatively short period. If you find yourself in this group, Kabbage should be a right choice for you. Also, you can read our Kabbage Review to get to know the company’s value proposition in more detail.

Quick overview of the company’s offer:

  • Line of credit ranging from $2,000 to $100,000 deposited in your PayPal account.
  • Each draw on the line is a 6 or 12-month installment loan.
  • To qualify for a line of credit, you need to have revenues of $50,000 annually and operate for at least 1 year.
  • Expected APR of 32-100%

You should also keep in mind that poor credit means higher interest rates. Thus, an expected APR of 32-100% + relatively high revenue, provides a high entry barrier and makes the company ill-suited for some small business owners. Luckily, many innovative platforms are emerging and making the industry more competitive. So, what are the Kabbage alternatives?

Kabbage alternatives – Review Table


The first of our Kabbage alternatives is an online SME-lender called OnDeck. The company was founded in 2007 by Mitch Jacobs and has issued far more than $5 billion in loans across the United States, Canada and Australia.

To apply for a loan with OnDeck your business must have a minimum 12 month track-record and earning at least $100,000 in gross annual revenue. Unfortunately, if you are not there yet, you should consider other Kabbage alternatives, like Bitbond. In terms of interest rates charged by OnDeck, the offer is comparable to Kabbage (typically APRs in the range of 30-50%), which are high compared to banks. The company also requires a 500+ credit score.

OnDeck has also done a really good job in terms of borrower application, approval and the funding process. With regards to paperwork, you need to submit your business tax ID, credit card statements, bank statements, Social Security number and your driver’s license. The procedure is smooth and in less than 48 hours you can get access to additional financing to purchase inventory, hire new employees and upgrade your space.

“OnDeck deducts a fixed, daily payment from your business bank account on a daily or weekly basis, depending on the product you are approved for. These fixed payments help ensure minimal impact to your cash flow and are proven to prevent the snowball effect often caused by missing larger monthly payments.” This is how repayment at OnDeck works. In short, the company automatically deducts weekly payments directly from your business bank account.

PayPal Working Capital

Looking further at Kabbage alternatives, we definitely cannot forget about PayPal Working Capital. Since its launch in 2013, the provider has issued over $2 billion in loans to over 90,000 small companies. The maximum you can borrow is $97,000; however, it can only be up to 18% of your annual PayPal sales. Therefore, if you want to borrow $10,000, you need to have annual PayPal sales of roughly $56,000. You should do a quick calculation now if you are eligible to apply. What is very convenient and cool about this solution is that the company transfers the loan directly into your PayPal account.

In terms of repayment, no interest is charged. Instead of paying interest, you will be charged a fixed fee with the amount depending on several factors: The amount of your loan; the repayment percentage you select; and your business’s PayPal sales history. The fee depends also on the percentage of your sales you put towards repaying your loan, and typically ranges from 10% to 30%. Effectively PayPal working capital APR ranges from 15% to 30%.

“Repayment is based upon merchants’ daily sales, meaning merchants pay more when business is strong and less during slow times, which is particularly useful for seasonal businesses”, according to PayPal. It simply means that the repayment is an automated process and depends on your current sales. The more you sell, the more and faster you repay. Regarding payment method, repayments are always deducted directly from your PayPal account which is also a really favorable solution.


This is perhaps one of the lesser known Kabbage alternatives. Bitbond is the market leader in global peer-to-peer lending, connecting small business owners with retail and institutional investors. To be the world’s first truly global SME-lender, Bitbond uses bitcoin as a payment network. This cuts out the banks and consequently reduces the usually eye-watering transfer and exchange fees to a minimum. This not only allows Bitbond to operate internationally, but also makes the platform significantly cheaper than other Kabbage alternatives.

Bitcoin also has the added bonus of being truly financially inclusive, functioning without the use of a bank account. This is excellent news for the 2 billion adults worldwide without access to a bank account.

Borrowers prove their creditworthiness on Bitbond by connecting their eBay, Amazon, MercadoLibre, Google Analytics, Debitoor, PayPal (and many more) accounts. Bitbond feeds this information into their machine learning algorithm which automatically scores the applicant precisely.

Here is a video of Bitbond CEO Radoslav Albrecht presenting the automated scoring system at this years Finovate in New York.

Do you have positive feedback on eBay, Amazon, or on other major marketplaces? Great, apply for your small business loan today.

Bitbond’s offer:

  • Available globally – borrowers from around the world can access additional financing for their business.
  • Loans up to $10,000 or £7,500
  • Flexible terms – borrowers with Bitbond can access credit over terms of between 6 weeks and 5 years.
  • Focused on online businesses and online sellers – Credit ratings are informed by data from social media accounts as well as online seller accounts with companies like PayPal, eBay or Amazon. This gives Bitbond greater global reach, and means that borrowers don’t have to rely on local trustees to access credit.
  • Interest rates range between 1% and 4% per month, which is significantly less than other Kabbage alternatives. The interest rates are calculated based upon the creditworthiness of the borrower and the length of the loan.
  • Fees – there is only one fee of 1-3% of the funded loan amount depending on the loan term. The fee gets deducted directly from the successfully funded loan.
  • Repayment schedules with Bitbond are fixed, and loans can be paid off before the term ends, with no financial penalty.

The bottom line – Kabbage alternatives

Nowadays, small business owners are really lucky to have so many alternatives to get short or long term working capital. This situation has its roots in the 2008 Financial Crisis which shook the industry. It destabilized and weakened the trust and reliance towards banks which consequently has caused a slow but gradual shift from traditional players to online entrants.

People noticed that there are also non-bank financial services which are able to satisfy their needs – even in a more convenient, cheaper and quicker way. Platforms like Bitbond, OnDeck, PayPal or Kabbage are really strong options to consider. However, if you are a small business owner or an online seller, Bitbond is a really good choice with lower average APR than other Kabbage alternatives and global coverage.

Thanks for reading our Kabbage alternatives article ;)


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