Getting more green with Kabbage
Start with a business financed via old-fashioned “factoring.” Next stir in a healthy dollop of internet, a dash of software as a service (SaaS), and a cup of venture capital, and you’ve got Kabbage, one of the latest in a new genre of small business financing platforms.
Kabbage and its many look-alike competitors have a common product—financing for small business—delivered to diverse targets via differing business models. Kabbage first asks an applicant business for access to various financial platforms it might be using (eBay, QuickBooks Online, Xero, etc.). Kabbage then harvests real-time data, combines them with other more traditional demographic data and credit reports, and employs algorithms to make automated decisions. The result is a credit answer in as little as seven minutes.
Make no mistake, Kabbage is most probably a lender of near last resort, but the company definitely provides liquidity (up to $100,000) for some cash-starved small businesses. In lieu of interest, Kabbage charges a fee on the original loan amount only for the period that the loan is outstanding. All Kabbage loans have a six-month term, but there are no penalties for early payment. The fees range from 1% to 13.5% for the first two months, and 1% for each of the final four months.
The app gives a borrower instant access to capital as well as an up-to-the-minute snapshot of his or her account. Competitors in the space include BlueVine, Fundbox, Kickstarter, Lending Club, Prosper, QuarterSpot, and several others.
- Website: kabbage.com
- Cost: Varies
- Operating Systems: iOS, Android, Web
A new type of political spending: BuyPartisan
As CPAs, many of us support political action committees (PACs) at multiple levels—some are professionally oriented, some interest-oriented, and others philosophically oriented. We use the power of groups to amplify our collective voices. But in addition to writing checks directly to individual PACs, there is another, more indirect method to “vote your pocketbook.” Shop your ideals!
BuyPartisan uses smartphone technology to scan a barcode, look up the product, identify the company (and, if necessary, the parent of that company), and then immediately report to you how that company’s PAC, individual employees, CEO, and board members support the major political parties. For example, I found it interesting that Microsoft’s political support of $48 million is an order of magnitude larger than Apple’s at $4.2 million. You can download the app yourself to compare which party got the most from whom. Snap a product’s barcode, and you can see instantly if your end-consumer purchase is (indirectly) supporting your political ideals. The authors say the app is in “beta” as it currently supports only the Fortune 250.
- Website: spendconsciously.com
- Cost: Free
- Operating Systems: iOS, Android
Online food-ordering services thrive with Seamless-GrubHub merger
Former online food-ordering competitors Seamless and GrubHub merged in 2013. Both employ web-app-enabled platforms to connect diners with takeout restaurants in nearly 1,000 U.S. cities. The apps (which are still separate platforms) present a sortable and filterable list of available delivery options based on time of day and the diner’s geo-location. Once an option is selected, that restaurant’s entire delivery menu is displayed, and the user simply selects the items desired. The transaction amount is calculated; tax and delivery charge, if any, are added; a tip option is provided; and the order amount is billed to your credit card. The order is passed to the restaurant, and the platform confirms the order to the diner with an expected delivery time. The platform provider takes a percentage from the restaurant side so there is no direct cost to the diner.
As expected, apps in the “sharing economy” genre use reviews extensively to assist diners in curating the hundreds of choices available in larger metropolitan areas. If you occasionally order in during busy season, Seamless and GrubHub will be a godsend. If you have restaurant clients, be sure to watch these apps carefully as the prepared food delivery market is growing rapidly. GrubHub alone has more than 4.5 million unique customers and serves more than 175,000 meals daily, and one of the hottest topics among restaurant operators is how to prepare entrees that travel well.
- Websites: grubhub.com, seamless.com
- Cost: Free to customers; restaurants pay percentage of each sale
- Operating systems: iOS, Android, Web
Greg LaFollette (email@example.com) is a strategic adviser with CPA.com, the commercial subsidiary of the AICPA.