If you are considering applying for a Kabbage business loan or line of credit you need to know exactly what is contained in the loan agreement documents. Here I decode the fine print in your loan agreement to help you make an informed decision about your Kabbage loan application.
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The Most important sections for you to know before you sign the Kabbage Loan Agreement are as follows:
Business Loan Requirements
You MUST use loan funds for business purposes only and make loan payments from a business bank account
Kabbage requires that you agree, ” This is a Commercial Loan, you agree not to use any portion of the amount loaned for personal, family or household purposes and not to repay us from any consumer accounts.”
If you choose the Kabbage loan 6-month term your payment schedule details the total cost, principal and interest, you will pay if you repay the loan in full by the anniversary date. I like how clear these amounts are listed in a table chart format.
Minimum Monthly Payments. You agree to make minimum monthly payments (each a “Minimum Monthly Payment”) in the amounts specified below on each scheduled monthly payment due date (“Payment Due Date”) shown on your monthly statement. The Minimum Monthly Payment for a Loan could be:
|Payment Due Date||Scheduled Minimum Monthly Payment:||Monthly Fee%|
|First Payment Due Date||$18,166.67*||1.50 %|
|Second Payment Due Date||$18,166.67*||1.50 %|
|Third Payment Due Date||$17,666.67*||1%|
|Fourth Payment Due Date||$17,666.67*||1%|
|Fifth Payment Due Date||$17,666.67*||1%|
|Sixth Payment Due Date||$17,666.65*||1%|
Late Fees– You will be reminded 10 days prior to your payment due date, however, if you fail to pay your minimum monthly payment you will be charged a late fee dependent upon your total outstanding loan amount
- $10 if your aggregate outstanding balance of all outstanding Loans is equal to or greater than $35 but less than $500
- $35 if your aggregate outstanding balance of all outstanding Loans is equal to or greater than $500 but less than $5,000
- $100 if your aggregate outstanding balance of all outstanding Loans is equal to or greater than $5000.
Arbitration of Claims
When you accept a Kabbage business loan you agree to accept and arbitrate claims with an option for small claims court as detailed below:
Except as otherwise stated below, any Claim (as defined below) will be resolved by binding arbitration pursuant to (a) this Arbitration Provision and (b) the code of procedure of the national arbitration organization to which the Claim is referred (as in effect when the Claim is filed). Claims will be referred to either Judicial Arbitration and Mediation Services (“JAMS”) or the American Arbitration Association (“AAA”), as selected by the party electing to use arbitration. Streamlined arbitration procedures will be used if available. If a selection by us of one of these organizations is unacceptable to you, you have the right, within 30 days after you receive notice of our election, to select the other organization listed to serve as arbitration administrator.
For purposes of this Arbitration Provision, “Claim” means any claim, dispute or controversy (whether in contract, tort, or otherwise) past, present or future, (collectively, “Claims”) as further described below. (If for any reason a selected organization cannot, will not or ceases to serve as an arbitration administrator, you or we may substitute another arbitrator or arbitration organization that uses a similar code of procedure and is mutually acceptable to both parties, in accordance with Section 5 of the Federal Arbitration Act. If both parties cannot agree on an arbitration organization, then either party may ask a court of competent jurisdiction to appoint a qualified arbitration organization.) An arbitration proceeding can decide only your or our Claims. You cannot join other parties (or consolidate Claims). Neither you nor we will be permitted to arbitrate claims on a class-wide (that is, on other than an individual) basis.
Small Claims Court Option. All parties, including related third parties, shall retain the right to seek adjudication of an individual (and not class or representative) Claim in a small claims tribunal in the county of your residence for disputes within the scope of such tribunal’s jurisdiction. Any dispute, which cannot be adjudicated within the jurisdiction of a small claims tribunal (including claims transferred by the small claims tribunal to another court) shall be resolved by binding arbitration. Any appeal of a judgment from a small claims tribunal shall be resolved by binding arbitration.
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