Online lending platform Kabbage is teaming up with Dutch bank ING Groep NV to offer automated loans to small businesses throughout Spain and possibly elsewhere in Europe.
ING is the first global bank to partner with Kabbage, which provides loans of as much as $150,000 to pay for inventory, hire staff or other day-to-day business needs. Starting in mid-to-late November, ING will originate the loans in Spain and Kabbage will help fund a portion of them.
“Kabbage’s automated loan application and approval process is both accelerated and incredibly simple for customers,” ING Chief Executive Officer Ralph Hamers said in a news release. “This initiative perfectly fits our strategic priority to increase the pace of innovation.”
According to the statement, the two companies plan to expand the program to other countries after launching in Spain.
The Wall Street Journal reported that Atlanta-based Kabbage is one of several startups “muscling into financial services and attracting attention from large banks.” Last week, it raised $135 million in equity from Reverence Capital Partners, ING and other investors.
“We’re enabling ING to reach a market that they may not have been reaching before,” Kabbage CEO Rob Frohwein told the WSJ. “The objective is to get capital into every small business’s hands that needs it and that can handle it.”
Kabbage uses a wide set of online data and algorithms as part of its underwriting process, with loan applications approved within minutes. Borrowers pay fees of as much as 12% for the first two months and 1% for each month thereafter.
Along with other financial tech startups like Kreditech, Lending Club, and Prosper, Kabbage has been “adept in leveraging advances in big data analytics, social media, and e-commerce to steal a march” on traditional banks, TechCrunch said.
Other overseas banks including Spain’s Santander and Canada’s Scotiabank have invested in Kabbage.