Small Business Lender Kabbage Expands into Consumer Loan Sector

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The move underscores the confidence of lenders in a strengthening economy and highlights the fact that borrower demand is increasingly high.

The Atlanta-based lender Kabbage, which has made a name for itself by providing unique kinds of loans to small businesses, is now setting its sights on the consumer loan market. The company just announced plans to offer “Kabbage Karrot” loans through Celtic Bank of Utah. These will be available with three and five-year payback terms in amounts as high as $35,000.

The loans will be competitively priced, too, with interest rates as low as 6.44%. They will also carry origination fees that range anywhere from around 1% to approximately 4.75%, based upon the credit worthiness of the individual borrower. One feature that makes these loans especially attractive and unique is that they can be applied for online, with credit decisions happening almost immediately in some cases. Loans may even fund within 24 hours for eligible and qualified borrowers.

The entrance of Kabbage into the personal loan arena can be attributed to an influx of investor cash that is moving off the sidelines as investors become more confident in the American economy. Investors also want to capture higher yields in an environment where interest rates have been historically low for many years.

Meghan Robinson, CEO of Sunovis Financial, also points out that this kind of activity is a telltale sign that the economy is doing well. “When a lender expands from the business loan niche and starts making consumer loans too, that tells me that they are convinced that we are in a broad-based recovery and they want to position themselves to get in on the action.”

Indeed, many newcomers in addition to the high-profile Kabbage are expanding into the market. One of the most successful leaders in the consumer loan sector is Lending Club, which has done so well that it is preparing for an initial public offering of its stock.

“Consumers are the lifeblood of any small business, of course,” says Robinson, “and when they have easier access to loans and more choices in the lending marketplace, consumers will naturally tend to increase their spending. That, in turn, bolsters the bottom line for small businesses in a cycle that keeps pushing the economy forward on all cylinders. So I interpret this strategy by Kabbage and other recent expansion activity by various lenders as a good sign of more prosperity ahead for 2015.”

Contact Info:
Name: David Cohen
Email: Send Email
Organization: Sunovis Financial
Address: Overland Park
Phone: 855 243-7191
Website: http://www.sunovisfinancial.com

Release ID: 66048

CONTACT ISSUER
Name: David Cohen
Email: Send Email
Organization: Sunovis Financial
Address: Overland Park
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