Description: Online lender Kabbage offers advances to small business owners based on their success as online merchants.

Source:  CNNMoney.com – video report

Date: 02/16/2012

Link: http://money.cnn.com/video/technology/2012/02/16/t-ts-kabbage-lending.cnnmoney/

Questions for discussion:

Explain the reasons this sort of financial lending arrangement works for both sides?

• Is the risk any greater for Kabbage than for conventional bank lending?
• What metrics would you look at to determine the amount to lend and the interest rate to charge?
• Could this business exist without collaboration with eBay and Amazon?
• If Kabbage grows into a major online lending force, how might you expect eBay and Amazon to respond?