What's the Lowdown on AMEX Business Line of Credit (formerly Kabbage)?

[Jazee]

I'm curious about a few things regarding the AMEX Business Line of Credit that their website doesn't answer so hoping someone with experience with them could shed some light.

I have a Sole Proprietorship and decided I want to start building a credit file associated with an EIN I recently obtained instead of my SSN so any business loans are kept off my personal credit file. I realize virtually all loans will still use my personal credit score (at least at this early stage) to qualify me so those inquiries may show up on my personal credit files. This is fine.

My understanding is pre-approval is a personal soft pull but final approval will require a personal hard pull?

If I apply using my EIN (in addition to my SSN) is AMEX good about reporting the trade line under my EIN and not my SSN?

Are there any maintenance or origination fees involved any time I choose to take draw?

My understanding is unlike Fundbox and Bluevine, there is no weekly repayment schedule, it's always monthly. Is there any early repayment penalty or do you just pay the portion of the annual interest rate for the period you had the balance?

Is it better to apply for a personal or business credit card with AMEX first to establish a relationship and then apply for the business line of credit a few months later or is there not much advantage?

[SouthJamaica]

---

@Jazee wrote:

I'm curious about a few things regarding the AMEX Business Line of Credit that their website doesn't answer so hoping someone with experience with them could shed some light.

I have a Sole Proprietorship and decided I want to start building a credit file associated with an EIN I recently obtained instead of my SSN so any business loans are kept off my personal credit file. I realize virtually all loans will still use my personal credit score (at least at this early stage) to qualify me so those inquiries may show up on my personal credit files. This is fine.

My understanding is pre-approval is a personal soft pull but final approval will require a personal hard pull?

If I apply using my EIN (in addition to my SSN) is AMEX good about reporting the trade line under my EIN and not my SSN?

Are there any maintenance or origination fees involved any time I choose to take draw?

My understanding is unlike Fundbox and Bluevine, there is no weekly repayment schedule, it's always monthly. Is there any early repayment penalty or do you just pay the portion of the annual interest rate for the period you had the balance?

Is it better to apply for a personal or business credit card with AMEX first to establish a relationship and then apply for the business line of credit a few months later or is there not much advantage?

---

I can't really answer any of your questions.

All I can say about it is:

1. I had the Amex "business line of credit"

2. IMHO it's completely fake; it's not a revolving line of credit at all, but a series of installment loans

3. The "fees" are wildly exorbitant.

[Jazee]

---

@SouthJamaica wrote:

---

---

I can't really answer any of your questions.

All I can say about it is:

1. I had the Amex "business line of credit"

2. IMHO it's completely fake; it's not a revolving line of credit at all, but a series of installment loans

3. The "fees" are wildly exorbitant.

---

On the fees, you are talking charges other than the interest.  I think I read that somewhere that they may have account maintenance fees and/or origination fees - really lowers my opinion of AMEX if so.

[Jazee]

I just read on MerchantMaverick.com:

"American Express Blueprint (formerly Kabbage) offers a business line of credit similar to Fundbox, but with a little more flexibility when it comes to term lengths. We appreciate that American Express doesn’t charge origination fees or maintenance fees, so you’ll only incur costs on the money you’re using,  making American Express Blueprint a potentially cheaper option than Fundbox."

But this seems to contradict that unles the "fees" are the interest?

What fees are charged for American Express® Business Line of Credit loans?

Nerd Wallet cleared it up:

Instead of traditional interest, American Express charges monthly fees depending on your loan's term. Total monthly fees incurred over the loan term range are:

• 3% to 9% for six-month loans.
• 6% to 18% for 12-month loans.
• 9% to 27% for 18-month loans.
• 12% to 18% for 24-month loans.

• No application fee, annual fee, monthly maintenance fee or origination fee.
• No prepayment penalty.
• Late payment and unsuccessful payment fees may apply based on the information in your loan agreement.

Pretty stupid AMEX can just plainly spell it out like Nerd Wallet.

[SouthJamaica]

---

@Jazee wrote:

---

@SouthJamaica wrote:

---

---

I can't really answer any of your questions.

All I can say about it is:

1. I had the Amex "business line of credit"

2. IMHO it's completely fake; it's not a revolving line of credit at all, but a series of installment loans

3. The "fees" are wildly exorbitant.

---

On the fees, you are talking charges other than the interest.  I think I read that somewhere that they may have account maintenance fees and/or origination fees - really lowers my opinion of AMEX if so.

---

No. They charge a fee in lieu of interest. But when you calculate the fee against the average outstanding balance, it comes out to a very high rate of interest.

[SouthJamaica]

---

@Jazee wrote:

I just read on MerchantMaverick.com:

"American Express Blueprint (formerly Kabbage) offers a business line of credit similar to Fundbox, but with a little more flexibility when it comes to term lengths. We appreciate that American Express doesn’t charge origination fees or maintenance fees, so you’ll only incur costs on the money you’re using,  making American Express Blueprint a potentially cheaper option than Fundbox."

But this seems to contradict that unles the "fees" are the interest?

What fees are charged for American Express® Business Line of Credit loans?

Nerd Wallet cleared it up:

Instead of traditional interest, American Express charges monthly fees depending on your loan's term. Total monthly fees incurred over the loan term range are:

• 3% to 9% for six-month loans.
• 6% to 18% for 12-month loans.
• 9% to 27% for 18-month loans.
• 12% to 18% for 24-month loans.

• No application fee, annual fee, monthly maintenance fee or origination fee.
• No prepayment penalty.
• Late payment and unsuccessful payment fees may apply based on the information in your loan agreement.

Pretty stupid AMEX can just plainly spell it out like Nerd Wallet.

---

Basically I consider a fee of 18% of the loan amount to be a 36% APR, because over the course of the loan the average outstanding balance is half the loan amount.  E.g., if you borrow $1000 for 12 months, the average outstanding balance (or principal amount) is $500, and the fee is a whopping $180. $180/$500=36%.

[Jazee]

---

@SouthJamaica wrote:

---

---

Basically I consider a fee of 18% of the loan amount to be a 36% APR, because over the course of the loan the average outstanding balance is half the loan amount.  E.g., if you borrow $1000 for 12 months, the average outstanding balance (or principal amount) is $500, and the fee is a whopping $180. $180/$500=36%.

---

Yes, that is about par for the course for that type of unsecured LOC.  Fundbox, Bluevine, OnDeck I believe all have much higher rates than a "traditional" business loan or line of credit for a large bank and especiall Credit Unions becuase they are relatively easier to qualify for. 

I just checked my Fundbox account, to borrow $3500 for 12 months it ends up being a 27% APR.  To borrow for 24-weeks, just shy of 6 months it's 8.9% so roughly about 18% APR.  I'm surprised as I thought Fundbox was going to be on the higher side of all those LOCs but AMEX makes it look like a bargain. Fundbox though charges the bulk of the interest in the first third or so of the payments.  So if you were doing a lot of short term loans and paying them off early, AMEX would come out cheaper.