Would it be right to say that the U.S economy is headed for a plunge? Investor’s confidence has gone down the toilet, as the trade war between the two economic powers, China and the U.S are still locking horns in the trade war battle. In the earlier stages of this summer, the Fed reserve did goose the economic growth to cover up on worries on trade conflicts.
Not everyone is becoming hysterical, though. The co-founder and Chief Executive Officer Kabbage, a small lending platform can confirm that their customers are optimistic that things will return to normal. Kabbage, the Atlanta company managed a loan of $670 million in the second quarter, which was a 45 percent increase from the previous year. Could it be that they have access to a merchant cash advance?
“Our customers, they see a real surge in their business, they see things go well, and they’re investing in the future,” Frohwein confirmed during a phone interview. It is important to note that all the loans at Kabbage don’t exceed $250,000 and that the Atlanta company has managed to generate $3 billion in borrowing during this year. Most U.S businesses are small because they have fewer than 100 employees, but they are important in terms of employment opportunities.
Kabbage’s user-base lending is exemplary when it comes to knowing the health of the American economy. But some online lenders have conflicting information about their activity and growth. Some investors are claiming that the short-term rates have skyrocketed as compared to the average rates, which is an indication that the recession period is near. Yet retail sales shot last month.
Frohwein can confirm that Kabbage’s borrowers indicate a small-business America while also representing a cross-section of America’s geographies and industries. In his statement, he says that 40 percent of the business’ loans came from customers who joined their platform between the years 2011 and 2017. Frohwein goes ahead to confirm that their company is attracting a ton of new customers than it has ever done before. “We see strong performance growth in borrowing and being paid back,” he said.
Frohwein has also stated clearly that the company hasn’t altered the way they lend their borrowers and that the process is still the same. He said that their stand not to change the style and method they use to give their borrowers have created trust, and customers have familiarized with the brand even more.
This is important because most customers can now relate to their business without finding difficulties when they want to borrow. It’s a prudent move for the Atlanta-based company led by one of the most influential men, Frohwein.
AUTHOR BIO: As the FAM account executive, Michael Hollis has funded millions by using merchant cash advance solutions. His experience and extensive knowledge of the industry has made him finance expert at First American Merchant.
