Photo Courtesy of Huffington Post
Finance 19 July 2018
In a world of corporations and big banks, the American dream of starting a business from the ground up is becoming harder to achieve. Getting loans and documentation of credit takes a long time and it is easy to lose steam and become discouraged when banks keep saying no. Meet Kabbage, a unique fintech company that sets out to help small businesses and start-ups get the funding they need to be successful. We talked to Co-founder and President, Kathryn Petralia, to get the inside scoop on what separates Kabbage from the rest of the financial world.
1. Where do things stand in the lending marketplace for small businesses to obtain funding?
Small business lending is accelerating largely due to the customer experience and easy access to funding. It's not that banks don't want to serve small businesses. They do, but it's difficult to do so in a cost-effective way. It costs a bank the same to underwrite a $5K loan or a $5M loan. Because of this, small businesses have been widely underserved. Kabbage is unique in that it provides an entirely automated lending service. Using big data and real-time connections with its customers, small businesses can apply, qualify and access a line of credit up to $150,000 in under ten minutes, without having to visit a bank or reapply for future funding. New approaches like this are super-charging the small business lending world, as well as small businesses, with growth and new possibilities.
2. How does Kabbage work?
Small businesses connect basic business data to Kabbage, allowing us to assess credit worthiness in minutes without requiring elaborate documentation, long-approval times or costly manual processes. Customers receive a decision right away, and qualified small businesses have access to an ongoing line of credit up to $150,000. They can take the amount they need whenever they need it, without additional fees, hidden fees, and there are no pre-payment penalties.
3. What kind of businesses are you looking for and why?
Kabbage helps any small business in any industry, from restaurants to construction, salons and spas, auto dealers and retailers. To qualify with Kabbage, a business needs to have been operating for at least one year and have a minimum of $50,000 in annual revenue or $4,200 per month over the last three months. Customers use Kabbage funding to manage cash flow, hiring and marketing as well as long-term needs such as business expansion or strategic investments.
4. What are the advantages of receiving funding through Kabbage rather than a bank?
The first advantage is time. Time is precious to small business owners. With Kabbage they can receive access funding in minutes, not weeks. The second advantage is a data-driven, ongoing partnership. We have a persistent connection to our customers and their business data, allowing us to provide them the capital they need whenever they need it. They never have to walk into a bank or reapply for funding. It allows our customers to focus on building their business and not on banking.
5. What is “alternative lending" and how is it changing small business lending?
Aside from what's provided above, it also helps remove any bias in the lending process. As it's entirely online, automated and analyzes objective business data, the process is 100 percent blind to age, race, gender and background. It removes any discouragement to apply for funding, freeing small businesses to have a chance to grow.
6. What is the future of small business lending now that alternative lenders are growing?
You'll see banks continually adopt these processes. Because it's entirely online, banks don't need to have brick-and-mortar locations to serve their customers. They only need an internet connection. It allows them to expand and reach new customers without heavily investing in new locations or operational costs. Kabbage partners with top global banks such as ING, Santander and Scotia Bank, allowing their small business customers to access funding in a more streamlined manner and have a significantly better customer experience.
7. How did you get involved in this industry?
I have over twenty years of experience working with large and small companies focused on credit, payments and commerce. It was the late 90s when I began to work in alternative lending so when co-founder Rob Frohwein approached me with his idea for Kabbage I immediately saw the value in using technology to reexamine the lending landscape. I could see that the lengthy, manual process that was used for funding decisions could be automated based on access to real-time data generated by numerous business operation.
8. What are the challenges facing women in the tech and banking world?
In recent weeks and months news of sexual harassment has spread across tech and fintech. The reactions I've seen by male VCs and leaders have included plans to “avoid meeting 1:1 with women". This is a massive step backwards and doesn't address the issue of culture in these organizations. It is incumbent upon both men and women to be beyond reproach in this regard, and creating distance between the genders is bad for women and it's bad for business.
9. What advice do you have for girls and young women looking to break into fields that have been traditionally dominated by men?
Although I haven't always been able to seek out a mentor, taking the time to find other women in these fields for advice and gain a new perspective on career paths is a great way to learn and network. There are some wonderful organizations out there for both girls and women that are really helping to break down barriers that previously stood in the way for women to have successful careers traditionally dominated by men.
3 Min Read
I am a proud Black business owner carrying a line of lip colors for the woman who wants to shine. At Vatarie Cosmetics you can find cruelty-free and vegan lip care products, including clear lip gloss and liquid matte lipsticks. The line is still under development, so there are more products in the making that you'll hear more about soon!
My products are high-quality and it is my dream to take my brand into high-end storefronts across the nation and even across the globe.
I have worked my way into my entrepreneurial career as I did not come from money. The goal of my cosmetic line is to bring excitement to everyone who tries the line. My products are high-quality and it is my dream to take my brand into high-end storefronts across the nation and even across the globe. I believe that with added makeup and a good set of threads, anybody can confidently face the world. I am a proud and firm supporter of the Black Lives Matter (BLM) movement and a proud member and supporter of the LGBTQIA community.
There have been plenty of hardships that I have had to face throughout my entire life, the most recent being the recent death of my father who passed far too soon. I have never allowed these hardships to deter me, and won't start now. I will continue to progress and work hard to build my business, knowing that this is what my father would have wanted.
About the Vatarie Line: What It's All About
Upon launching the line, I had the mission of inspiring every human to find their inner beauty and to have fun along the way. With this in mind, my products are designed for people of all genders, races, religions, and creeds. The Vatarie line will have more to offer customers very soon as I am continually working on developing products and expanding the line. In addition to the lip colors currently offered, the line will soon include highlighters, eyeshadows, and new lip gloss additions.
I believe that no one needs makeup to validate themselves, and we are all beautiful on our own. I do believe, though, that makeup can make life a lot more fun. Now more than ever we are living in a world where there is so much sadness and darkness. Sometimes all we need to change our moods and get away from that darkness is something to help us feel better and more vibrant — this is where a pop of makeup and a well put together outfit can really make an impact.
Now more than ever we are living in a world where there is so much sadness and darkness.
I encourage everybody to embrace their inner beauty and inner style, and express themselves no matter what. My line of products is inspired by high fashion and designed to make a bold statement. The running theme across my products is empowerment at every stage and level. I create products that make my customers feel happy, and I ensure I am happy myself with my products before I release every single one. There is no place for cutting corners as I believe in producing the highest quality product.
I bring my sense of humor and quirky personality into my products and you can see this in the names of each item. Take the lip color "Blood Money," which signifies all the money, tears, sweat, and yes, blood that was put into the brand. Let me tell you, it was hard work, and it still is hard work, but at the end of the day, it fulfills me to know the type of quality I am providing. It gives me great pride to create a line of legendary products that will positively affect someone and bring them to a place of self-love and acceptance.
About the Past that Gives My Business Meaning
I have struggled over the years with mental abuse that has left me feeling as if "I wasn't enough." Added to that, being a Black woman in an industry that is predominantly dominated by other races, I had to work harder to get to where I am today.
Coming from a broken home, my family struggled with addiction, making my entire childhood a miserable nightmare. My mother abandoned us as she was being physically abused, and it was up to us the kids to do everything necessary to take care of the home and each other. We eventually ended up living with my grandmother in Miami, Florida. At a very young age, I had to endure physical and mental abuse and was locked up. At the age of 22, I lost my younger sister to gun violence and found myself raising her one-year-old son as my own.
Being a Black woman in an industry that is predominantly dominated by other races, I had to work harder to get to where I am today.
While my past was a rough one, it is what has made me the strong, independent, and vibrant woman I am today. That woman strives to be her best every day and works tirelessly to provide a line of only the best cosmetics products. I couldn't see this while I was living through those bad situations and struggling to grow up, but I can look back and see how I was made more resilient because of my hardships.
As I grieve over my father's recent passing, I become stronger. It is this added personal strength that will push me forward in everything I do and will be reflected in my work ethic and in the development of new products for my Vatarie line of cosmetics.