Kabbage: Small Businesses Turning to Mobile Lending in Big Numbers
Most small businesses out there know what it’s like to be in a cash crunch at one point or another. Someone doesn’t pay an invoice in a particularly timely fashion…if at all…but the bills to the business come due at the same time every month. Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.
Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.
So not only are there more loans being taken out, there are much higher numbers being taken out as loans as well. Kabbage has been actively building its infrastructure to tackle higher demand, including a recently-acquired credit facility from Credit Suisse, and a new partnership effort from Santander UK where the Kabbage platform was licensed to help build its own lending operations. There have also been some threats to the Kabbage movement, including a lawsuit over the concept of a “true lender.”
While there’s always sort of a twinge of concern about seeing a lot more loans get taken out—loans are a risky practice, especially if an industry takes a sudden downturn and leaves a lot of people on the hook—there’s also a note of optimism that goes along with this. Clearly, small businesses are feeling increasingly good about their chances of long-term survival, as reflected by the fact that they’re taking out a lot more loans. They wouldn’t take the loans out if they didn’t believe they could pay them back.
Seeing mobile payments and mobile platforms involved in the lending is even more encouraging; this is a market that’s likely to stick around and maybe even keep growing. Kabbage is just part of this picture, and mobile is likely to be a big part of lending in general for some time to come.