Kabbage teams up with Intuit to expand its financing business
SAN FRANCISCO May 14 (Reuters) - Kabbage, a start-up that specializes in financing for small online merchants, has teamed up with Intuit Inc to expand its service to bricks-and-mortar businesses.
Kabbage said on Tuesday it will use data from QuickBooks, Intuit's accounting software, to make quick decisions on whether to extend financing to businesses that use the software.
About four million retail, services and manufacturing businesses use QuickBooks, expanding Kabbage's potential reach. Until now, Kabbage has focused on financing for sellers on e-commerce marketplaces, such as those run by eBay Inc and Amazon.com Inc.
Kabbage is one of several companies that are using new sources of data from the Internet to underwrite differently than banks and other traditional lenders.
PayPal, the payment division of eBay, and Amazon have also begun lending money to merchants that sell on their marketplaces, using online data to underwrite the process. [ID: nL2N0CQ0TY]
Some banks already use QuickBooks data, along with lots of other information, to help them underwrite small business loans. However, Kabbage will be the first company to use only QuickBooks data to decide whether to extend financing.
For Intuit, teaming up with Kabbage makes its QuickBooks service more attractive to small businesses, by helping them get financing more easily.
"Small businesses have had a terrible time trying to get capital," said Richard Preece, a director at Intuit's QuickBooks unit. "If it's easier for QuickBooks users to get financing, that's a good thing."
Through the partnership, Kabbage gets access to information including cash flow, employee count, inventory levels and vendor payments, Preece noted.
"There are literally hundreds of data points and the combination of those over time allows Kabbage to start underwriting in a way that banks don't do today," he added.
Thomvest Ventures is a Kabbage investor. Thomvest Chairman Peter J. Thomson is a director of Thomson Reuters Corp, which owns the publisher of this report.
- U.S.' Kerry voices 'regret' to India over diplomat case |
- Washington, DC city council raises minimum wage to $11.50/hr in 2016
- China confirms near miss with U.S. ship in South China Sea
- Medical bills underlie 60 percent of U.S. bankrupts: study
- Mega Millions winners in Georgia, California to split $648 million |