Alibaba Partners With U.S. Loan Provider Kabbage for Initiating Pay Later Program
Alibaba.com is Alibaba Group’s online platform for global B2B business, and with this new Pay Later program, American buyers can secure a loan up to $150,000 for their orders.
Chinese e-commerce giant Alibaba Group Holdings Ltd. (NYSE: BABA) announced that it has partnered with Kabbage, a U.S.-based lending platform for SMEs, to provide financing on Alibaba.com as part of a new program called Pay Later.
Alibaba.com is Alibaba Group's online platform for global B2B business, and with this new Pay Later program, American buyers can secure a loan up to $150,000 for their orders by submitting several business data during the checkout process.
"Financing at the point of sale requires a fully automated solution that can handle the immense volume of daily transactions that occur on Alibaba.com," said Rob Frohwein, CEO of Kabbage. "We are incredibly impressed with the service and value that Alibaba.com delivers to American businesses and want to do all we can to support their important mission. The collaboration with Alibaba.com has already delivered millions of dollars of purchasing opportunity to U.S. small businesses and showcases the adaptability of our technology."
Kabbage said each purchase financed via Pay Later creates a six-month term loan with rates as low as 1.25 percent per month and there are no hidden fees, such as fees to maintain the line of credit, order transaction fees, or early repayment fees.
The program launched in beta mode in June last year and Alibaba said more than 80 percent of users believe the Pay Later function is easier than any other business financing opitions they tried before. More than 68 percent of users said this function has allowed them to increase order sizes on the site.
"We recognized an opportunity to give our customers a convenient financing solution that allows them to improve their cash flow at competitive rates, so they can have the cash they need to grow their businesses," said John Caplan, head of Alibaba B2B in North America.
Based in Atlanta, Kabbage provides funding directly to small businesses and consumers through an automated lending platform by using big data and machine learning to determine eligibility. The fintech unicorn is backed by SoftBank Vision Fund and BlueRun Ventures.