Watch this presentation as we walk through why you should consider outside funding, the factors to consider, and the pros and cons with each of the options – from online loans and credit cards to peer-to-peer lending, crowdfunding and business grants.

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The Pros & Cons of
Small Business Funding Options

2. Meet the speakers…
Andres Thomas
Customer Success
Kabbage, Inc.
Moderator
Jon Parise
Head of Customer Marketing
Kabbage, Inc.

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Visit this page to download: http://kabb.ag/loans101

4. So…you need money.

5. In many ways, there has never
been a better time to get capital
So many options:
• Traditional bank loans
• Online lending
• Peer-to-peer lending
• Crowdsourcing/funding
• Angel investing/lending
• SBA loan
• Merchant cash advances
• Government grants
• Credit cards
• Friends & family

6. The right option?
Of course, it depends.

7. Factors to consider
• Application process
• Time to apply / decision
• Convenience and funds
availability
• Loan amount
• Cost (APR, origination and
closing fees, etc.)
• Repayment options
• Customer service

8. You have
an idea
You
made it!
You’re ready
for the next
big step
The right option for you could depend
on where you are as a business

9. You’re wondering:
• Is this a good idea? Good enough that people will want to invest?
• How much money do I need to get this idea off the ground?
• What resources do I need – people, equipment, inventory, etc.?
• How much personal debt / risk am I willing to take on?
• Am I ready for the unexpected?
You have
an idea
You
made it!
You’re ready
for the next
big step

10. You could consider… Because… But you should also consider…
Personal funds It’s your money. IT’S YOUR MONEY!
Are you willing to put this on the line?
Is your spouse equally willing?
Personal Credit Cards You already have one. And
points!
High APRs; Can’t pay employees on
credit.
Crowdfunding It’s sexy.
Can be an inexpensive and
low risk path.
Get validation for your idea.
Highly competitive and time intensive.
All or nothing approach.
Transparency. Often treated as
income, therefore taxable.
Friends & Family They love you. Do you want your business partner
sitting next to you at Thanksgiving?
Angel funding You can get large amounts of
money; guidance from the
investor.
Are you willing to give up equity?
Challenge in finding willing investors.
Phase 1: You have an idea

11. You’re wondering:
• How can I invest in inventory, staff, facilities, etc. in order to build
a solid revenue stream?
• How can I pay my vendors on time?
• Am I willing to put up a personal guarantee on any debt I take?
• How will I pay my employees when cash flow is tight?
• How can I generate the highest ROI on any debt I take on?
• Am I ready for the unexpected?
• How can I have peace of mind while trying to grow the business?
You have
an idea
You
made it!
You’re ready
for the next
big step

12. You could consider… Because… But you should also consider…
Traditional bank loan /
line of credit
You can typically get lower
rates and a larger sum of
money; it’s what you’re used
to.
They will speak to you if you can take
a larger sum. Speed to funds;
Paperwork; Likelihood to get funds;
Collateral (personal guarantee +
asset required).
Small Business Credit
Cards
Perks and points. Annual fees; High APRs; Vendors or
employees that don’t accept credit
cards.
Online lenders – Line of
Credit (Kabbage)
Quick application / decision
process; higher likelihood to
qualify; ability to take amount
needed.
Shorter terms; more ideal for
“smaller” investments (<$150k).
Online lenders –
traditional loan product
Quicker application process
than banks.
Payback options; higher rates on
average; lump sum.
Government grant Inexpensive way to get funds
(may require matching).
Difficult to obtain; stringent
guidelines.
Phase 2: You made it!

13. You’re wondering:
• How much money do I need to make that big investment?
(R&D, new location, new workforce, etc.)
• How long will it take me to realize a return?
• How quickly do I need those funds?
• Do I have a rainy day funds?
You have
an idea
You
made it!
You’re ready
for the next
big step

14. You could consider… Because… But you should also consider…
Traditional bank loan /
line of credit
You can typically get lower rates
and a larger sum of money; it’s
what you’re used to.
They will speak to you if you can
take a larger sum. Speed to funds;
Paperwork; Likelihood to get funds;
Collateral (personal guarantee +
asset required).
Online lenders – Line of
Credit (Kabbage)
Quick access to capital; control
your repayment; ability to take
amount needed.
Shorter terms; more ideal for
“smaller” investments (<$150k).
Online lenders –
traditional loan product
Quicker application process;
may qualify for a larger amount.
Payback options; higher rates on
average; lump sum.
SBA Loan Long-term, fixed-rate financing
for major fixed assets.
Slow approval process (1+ month).
Venture Capital Ability to make large investments
and fuel hyper growth; strategic
partnerships.
Lengthy due diligence process;
giving up equity in your business.
Phase 3: You’re ready for the next big step!

15. You have
an idea
You
made it!
You’re ready
for the next
big step

16. So. Many. Options.

17. So! Many! Options!

18. Kabbage vs. Other Online Lenders
KABBAGE vs OTHERS
1 year in business Min requirement Varies
Minutes; instant decision Time to apply Hours; decision in 24 hours
No origination fees Fees Origination fees
No prepayment penalty Repayment Prepayment penalties
Line of credit: Take as much as you
want when you want
Flexibility
Traditional loan product; one lump
sum
We connect to your existing business
data sources, no need to fill out
extensive information for application
Innovation Traditional credit criteria
Dedicated customer service team; live
personalized service
Customer
Service
Call center based customer service
team, often outsourced
Your Kabbage loan grows as you grow Partner Reapply each time you need funds

20. Kabbage Kam Webinars
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Get Small Business Content
Visit this page to download: http://kabb.ag/loans101

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From @KabbageInc
Thank you!