Kabbage pauses lending and suspends existing credit lines – Business Insider

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The US-based online small- and medium-sized business (SMB) lender has paused lending for the time being, according to a company post.
Additionally, Kabbage reportedly cut off credit to some of its existing borrowers without giving them any notice, with a number only finding out about the suspension when they logged into their accounts, per Bloomberg. At the time of writing, Kabbage had not disclosed when it would continue with its normal lending operations, though the suspension appears to be temporary. For context, Kabbage lent out $2.8 billion to SMBs throughout 2019. 
Kabbage’s decision to suspend credit could hurt customer satisfaction in the short term, but its decision is along the same lines as other lenders’.
Moving forward, Kabbage wants to support the Small Business Administration (SBA)’s Paycheck Protection Program (PPP) — and focusing on a white-label solution might be an effective way to do this. The alt lender is now directing all of its resources toward helping automate loans under the PPP, which consists of a $350 billion loan program for small businesses with fewer than 500 employees.
Such loans are known to take weeks or months to be processed, but with the help of Kabbage’s technology stack, this time could be greatly reduced — Kabbage can usually approve customers within minutes for up to $200,000, per its website. That said, it is still uncertain whether alt lenders will be able to participate in the government’s loan program, despite many players lobbying to become a part of it.
Given Kabbage’s experience with offering white-label products to third parties, for the time being, the alt lender should focus on making its technology available to lenders able to extend SBA loans. 
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