Kabbage is the latest company to decide that it really is hip to be Square, after all.
The SME online lender announced that it will now use transactional data from companies that use Square to process payments as a tool for helping allocate capital and make loans.
The use of Square data for underwriting purposes is novel, according to Kabbage. Company co-founder and CEO Rob Frohwein credits the platform’s “flexibility and power” in describing Kabbage’s ability to “leverage the broadest range of business data sources … to (make) funding simple and accessible to small business everywhere.”
Kabbage is a pioneer in the field of online small business lending. The Atlanta-based company specializes in analyzing data from actual business activity, from shipping data and seller channels to social media. This enables the lender to know more about their potential borrower than is often discovered using traditional credit modeling methods. A partnership with Intuit provides “under 7 minute” funding decisions for customers who use QuickBoooks.
Kabbage was most recently in the headlines with news of its partnership with Xero. The deal allows Kabbage to use small business accounting data as part of the basis for underwriting decisions. The company also announced earlier this year that it had integrated with Stripe to make it easier for companies that process online payments to apply for financing.
Kabbage demoed its technology as part of the FinovateSpring show in San Francisco this spring. See the company in action here.