Kabbage vs. BlueVine: Which Lender Is Better for Your Small Business?

Kabbage vs. BlueVine: Which Lender Is Better for Your Small Business?

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If you’ve been considering a loan from Kabbage or BlueVine, but aren’t sure how to compare the two lenders, we have done the hard work for you. Below we take a look at each lender’s product offerings and provide advice on when to choose one lender over the other. Generally speaking, Kabbage is a better fit for business owners who have lower credit scores and BlueVine is a better fit for newer businesses with demonstrated revenue.

Editor's note: Kabbage is currently only available to previous Kabbage customers who have qualified for a line of credit in the past and customers of American Express who have a Business Card or small business owners who have an American Express consumer card relationship. Kabbage will be opening to prospective borrowers in November.

Kabbage vs. BlueVine Summary

We took a look at how Kabbage and BlueVine compare to one another. In general, we recommend Kabbage more for business owners who want a more traditional line of credit product or who have lower credit scores. BlueVine, in comparison, is better for those looking to clear unpaid invoices or for newer businesses. In the table below is a brief summary of the eligibility criteria and loan products offered by Kabbage and BlueVine. We compared credit and business requirements for each lender as well as the products offered, including rates, terms and repayment options.

Better For
  • Longer term line of credit
  • Credit scores 640 or above
  • Lower revenue businesses
  • Freeing up cash from unpaid invoices
  • Newer businesses
Minimum time in businessn/a
  • Six-Month Line of Credit: 2 years months
  • Invoice Factoring: 3 months months
Minimum annual revenuen/a$300,000 in annual revenue
Minimum credit score640600
Personal guaranteeNoYes
Other requirementsExisting relationship with Kabbage or American ExpressAverage monthly bank account balance (line of credit only): $1,000
Products OfferedLine of credit
  • Line of credit
  • Invoice factoring
Loan Amount Range$1,000 - $150,000
  • Six-Month Line of Credit: $5,000 - $250,000
  • Invoice Factoring: $20,000 - $5 million
APR Range9.00% - 36.00%
  • Six-Month Line of Credit: 4.80%
  • Invoice Factoring: 15.00% - 68.00%
Loan Terms6, 12 or 18 months
  • Six-Month Line of Credit: 6 or 12 months
  • Invoice Factoring: Up to 90 days
Repayment OptionsMonthly
  • Six-Month Line of Credit: Weekly
  • Invoice Factoring: Weekly
Prepayment PenaltyNoNo
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When to Use Kabbage Over BlueVine

Kabbage may be a better option than BlueVine if:

  • You want a longer term line of credit or monthly repayment
  • You have an existing relationship with Kabbage or American Express

If you’re looking for a longer term line of credit, Kabbage offers 6-, 12- and 18-month terms. BlueVine, in contrast, only offers 6-month terms on its line of credit product. BlueVine also requires weekly repayment on its line of credit, which some borrowers might find disruptive to their business’ cash flow. In this case, consider Kabbage as the lender requires monthly rather than weekly repayment. One drawback to using Kabbage is that prepaying your loan won’t save you a ton in interest. While neither lender charges prepayment penalties, we calculate that you’ll save less with Kabbage if you prepay your loan balance. This is because Kabbage assesses a monthly fee rate on its line of credit (rather than a traditional interest rate) that is higher in the first few months.

Kabbage has stricter credit requirements for than BlueVine, so it’s a better choice for those borrowers with higher credit scores. For comparison, BlueVine requires borrowers have a minimum credit score of either 600 to qualify for its line of credit product whereas Kabbage requires 640. BlueVine requires business owners have credit scores of at least 600 and generate at least $10,000 in monthly revenue.

When to Use BlueVine Over Kabbage

We recommend BlueVine as the better option than Kabbage if:

  • You want to free up cash from unpaid invoices
  • Your business is less than one year old, but has demonstrated revenue

For businesses looking to cover cash flow gaps from unpaid invoices, BlueVine is likely the more suitable choice. BlueVine offers a specific invoice factoring product, which allows business owners to receive advances on invoices up to $2 million. If you sign up for BlueVine, you can submit specific invoices to advance, and you will receive 85% to 90% of the invoice upfront. When your customers pays the invoice, you will receive the remaining 10% to 15% less fees. For example, if you submit a $10,000 invoice to BlueVine, you may receive 85%, or $8,500, upfront. Let’s say your customer pays the invoice after five weeks, and the weekly fee assessed by BlueVine is 1%. The fee would amount to $500 ($10,000 x 1% = $100 and $100 x 5 = $500) over five weeks, and when your customer pays, you will receive the remaining 15% of the invoice less the $500 in fees. This would come to $1,000 ($1,500 - $500). In total, you would therefore receive $9,500 ($8,500 + $1,000) on the $10,000 invoice you advanced through BlueVine.

BlueVine is also a great option for businesses that are less than one year old. To qualify at BlueVine, you must be in business for at least three months to apply for invoice factoring and at least six months to apply for a line of credit. One disadvantage of BlueVine is the higher revenue requirements: to qualify for invoice factoring your business must do at least $10,000 in monthly revenue, and to qualify for a line of credit, your business must do at least $5,000 monthly.

How to Choose Between Kabbage and BlueVine

When evaluating these two lenders, we recommend you first consider if you even meet the basic eligibility criteria for each lender. Provided you qualify at both lenders, next think about how much money you need, what you need it for and how you want to repay. Both lenders can fund your loan offer within a couple of days, so speed of funding isn’t a differentiating factor. However, your planned use of funds will help you decide which lender is better for your needs. If you need to clear invoices, for example, BlueVine is likely the better choice. However, if you want a more traditional line of credit product, Kabbage offers that. In addition, consider the repayment schedule -- does a monthly or weekly repayment schedule work better for your business? Some business owners prefer making a large lump sum payment each month, but others might find this puts a strain on their business’ financials.

As a last word, make sure to pay attention to the loan contract if you are approved for a loan. Before signing, read through the contract to understand what you are getting yourself into. You should understand how much money will be disbursed to you, how you will repay and what each repayment will be and how much you will repay in total. You should also be aware of any extra charges or fees you could incur for breaking terms in the contract or paying late. In fact, it may be advisable to have a lawyer or legal advisor review the contract for any red flags or confusing terms.

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