American Express in talks to acquire business lender Kabbage

American Express is in “advanced talks” to acquire small-business lender Kabbage for as much as $850 million in an all-cash deal, Bloomberg reported.

Why should we care?
Should the acquisition materialize, American Express would gain access to a bigger small-business customer base, complementing efforts to grow its small-business card portfolio in recent years. Kabbage recently confirmed that it lent 209,000 small businesses $5.8 billion in PPP loans, making it the third-largest PPP lender by application volume. As of April, the Softbank-backed company provided more than 225,000 U.S. small businesses access to over $9.5 billion of working capital. Despite Kabbage’s impressive PPP numbers, the online lending industry was hit hard by the pandemic, forcing many companies to halt originations and offer relief to struggling businesses. The reported price tag for Kabbage stands in stark contrast to Enova’s $90 million purchase price for OnDeck. Kabbage is valued at more than $1 billion.