Kabbage President Kathryn Petralia and CEO Rob Frohwein.
Kabbage furloughs “significant number” of US staff
The lender has also closed its office in Bangalore.
US alternative lender Kabbage has furloughed a “significant number” of its 500-strong team, according to a leaked memo.
According to the report furloughed staff will continue to receive benefits and the intention is for them to return to work once the coronavirus crisis ends.
“While the duration of the furlough remains uncertain, please bear in mind that the full intention of furloughing is temporary,” wrote CEO and co-founder Rob Frohwein.
“We simply have no clear idea of how long quarantining or its reverberations in the economy will last.”
The specific challenge Kabbage and other US lenders face is that due to the huge impact coronavirus is having on SMEs in America, sending thousands into administration, it’s unable to lend based on its standard criteria.
In the UK the situation is somewhat better, with the government guaranteeing loans of up to 80 per cent, but only through the somewhat limited Coronavirus Business Interruption Loan Scheme.