Kabbage, a startup that provides financing to online merchants, announced yesterday that it has partnered with UPS to use customer shipping data to make better underwriting decisions.

“Effective today, small businesses will be able to direct UPS to share their shipping history with Kabbage via the Kabbage.com website, making it possible for them to potentially obtain more capital at lower rates.”

A video on Kabbage’s blog states that UPS is also providing Kabbage an undisclosed amount of capital to grow its customer base and fund more small businesses.

To learn more about Kabbage, watch its FinovateFall 2011 demo.