How Kabbage, Now Part of Amex Determine Credit Line Amount?

Kabbage, now part of American Express, helps small businesses get the money they need through a business line of credit. But how do they decide how much credit to give you? It’s not as complicated as you might think. Amex looks at things like your business income, how long you’ve been in business, and other important factors to figure out the right amount. In this article, we’ll explain how Amex determine credit line amount.

What is Kabbage, and How Has it Changed with Amex?

Kabbage started as a financial tech company focused on giving small businesses quick access to loans. Their main product was a business line of credit, where business owners could draw funds as needed and pay interest only on what they used. This helped small businesses manage cash flow easily without waiting long for traditional loans.

In 2020, American Express bought Kabbage, bringing big changes. Now, Kabbage’s lending services are part of the “American Express Business Line of Credit.” With Amex’s backing, the loan process has become more streamlined and secure, and some policies have been updated to align with Amex’s standards. While the application is still simple and online, Amex has added some stricter eligibility checks and requires more documentation, making the process a bit more structured but also reliable.

Key Factors American Express (Kabbage) Uses to Determine Credit Line Amount.

American Express considers a few main factors to decide how much credit a business can get. Here are the key points:

1. Business Revenue: Amex looks at the monthly revenue of the business. Higher, steady revenue means you’re more likely to get a larger credit line.
2. Business History: They review how long your business has been operating. Older businesses with stable records are often seen as less risky.
3. Credit Score: Both the business and personal credit scores are checked. A higher score shows reliability in paying debts and can lead to a better credit line offer.
4. Cash Flow: Amex also considers your overall cash flow. This includes how much money regularly comes in and goes out, giving them an idea of your ability to manage and repay funds.
5. Debt Levels: They check any other debts the business already has. Lower debt levels suggest more room for new credit.

These factors help American Express (Kabbage) create a credit line offer that suits the business’s financial health and needs.¹

Amex collects and examines various data points to determine the amount of credit it offers for a business line. First, they analyze business financials, like revenue trends, cash flow, and outstanding debts. They may also review past credit history and other financial obligations to understand the business’s ability to repay.

Amex uses this information to evaluate a business’s financial health and stability, allowing it to set a credit line amount that aligns with its financial profile and capacity to manage debt responsibly.

How Amex Adjusts Credit Line Limits Over Time?

American Express adjusts credit line limits over time by evaluating your payment behavior, spending patterns, and overall account activity. As businesses show consistent payment history and responsible credit use, Amex may offer higher limits to support growth. Conversely, if financial challenges arise, they may adjust the limit downward to better align with the business’s current financial capacity.

This approach allows Amex to maintain flexibility while helping manage credit responsibly.²

How to check your credit limit on Amex?

To check your credit limit on Amex, simply login to your American Express account on their website or mobile app, then select the card you want to check. Your credit limit should be shown on the account summary page, usually near your balance or available credit. If you can’t find it online, you can also call the customer service number on the back of your card, and they’ll let you know your credit limit.

Tips for Increasing Your Amex Credit Line Amount:

• Pay Your Bills on Time: Always pay your credit card bills on time. This shows that you are responsible for your money.
• Use Your Card Regularly: Use your Amex card for purchases. This helps show that you can manage your credit well.
• Keep Your Balance Low: Try to keep your balance low compared to your credit limit. This is called your credit utilization, and it should be below 30%.
• Update Your Income: If you have a higher income now, let American Express know. A higher income can help you get a bigger credit line.
• Request a Credit Line Increase: You can ask for a credit line increase directly through the Amex website or app. Make sure to explain why you need it.

Conclusion.

In summary, understanding how American Express evaluates credit lines for Kabbage loans is crucial for small business owners seeking financial support. By focusing on factors like business revenue, history, credit scores, and cash flow, Amex tailors credit line offers to fit individual needs. Implementing the tips provided can enhance your chances of securing a higher credit limit.

As the business landscape evolves, staying informed about these factors will empower you to make strategic financial decisions that support your business growth.