Small business lending platform Kabbage announced a partnership with Scotiabank today to make it easier for residents of Canada and Mexico to take out small business loans of up to $100,000 in minutes.
Kabbage has historically worked directly with business owners. The company offers rapid evaluation and a line of credit. The company has relied on partnerships with banks like Silicon Valley Bank to supply the capital to small business owners. The platform uses innovative metrics like social media followers and Yelp reviews to maximize loan de-risking. Small business owners still pay a large interest rate premium to borrow but don’t have to deal with predatory loan sharks or slow and conservative traditional banks.
Scotiabank is the third international bank that has partnered with Kabbage. The company has already signed deals with ING and Santander.
Kabbage supports banks by providing them with valuable data on businesses seeking capital. Kabbage offers workshops for institutions and implementation staff to help them onboard the platform. The partnership between Scotiabank and Kabbage moved incredibly rapidly. Kabbage first contacted the bank in January and finished the integration in less than six months.
A suit of APIs integrate directly into the existing backend of banks like Scotiabank. Kabbage also integrates on the front end to streamline the customer experience while retaining aspects of Kabbage’s direct offerings.
“We want to grow beyond small business lending,” said Pete Steger, Director of Business Development at Kabbage.
Kabbage is in late stage conversations with six more banks. Depending on the deal, Kabbage charges a one time implementation fee as well as ongoing usage fees.
While Kabbage has recently been making moves in the platform space, they have no plans to slow their core direct lending efforts.