Jacob and Bri D'Angelo were determined that Rolling J's Mobile Bistro was going to be a hit in Chattanooga when they opened the business in 2013. The couple had a passion for food, an entrepreneurial spirit and an $85,000 rolling restaurant.
The business built slowly as contacts were made and customers got a taste of the menu that featured a touch of Cajun since D'Angelo's love of food has a Louisiana heritage. Employees of U.S. Xpress, Amazon and Shaw Industries became regular customers, and the reviews were good. The Chattanooga Market became a regular stop for the "weekend warriors," as Jacob describes the couple.
Then the truck broke down.
"We were losing revenue every day we weren't on the street," D'Angelo recalls, "and I was determined to get back on the street."
The answer was Kabbage, an online lending service for small businesses that struggle to get timely loans from the traditional banking industry. Kabbage, based in Atlanta with four additional offices around the country, has loaned more than $6.5 billion to 175,000 customers since its founding in 2008, $2 billion of that total just last year. The company is currently loaning $10 million a day to 1,400 small businesses, according to Laura Goldberg, the company's chief revenue officer.
"My grandfather had the first food truck in Chattanooga back in the 1970s, and I needed a vehicle, something I could move food out of, and a trailer was the most affordable," says D'Angelo. "I already knew a regular bank wouldn't talk to me. I had a buddy who told me about Kabbage. Kabbage gave me a chance when no one else would.
"I didn't want to spend any reserves. I figured that if I could get back to work, I could pay the loan off, and that was better than nosediving a solid business."
D'Angelo took $7,600 from his line of credit with Kabbage, bought the trailer and got back on the street.
"The truck had a blown engine and it ended up taking a year to get it fixed," says D'Angelo, "but we stayed in business with the trailer. We still use it today and it became another source of revenue."
On a recent morning — two years since the truck broke down — the D'Angelos were located at the lower building of the US Xpress campus off Bonny Oaks Drive near I-75. The business has more than tripled its revenue since 2016 and now D'Angelo gets calls from companies asking him to organize other food trucks for them. "Rolling J's and friends," he says.
His relationship with Chris Thomas, whose company runs the Chattanooga Market and Finley Stadium, led to his supervising the cooking for the suites at the stadium. On this day, the specials would be Philly cheese steak or turkey on sourdough. The couple will open their second business, a sandwich shop, at 804 Riverfront Parkway before the end of summer.
"I'm 35 years old, and I don't know how it used to be," says D'Angelo, "I can tell you that my first experience as a business owner going into a bank was like trying to order off a menu you couldn't read. They looked at me like, 'No, I can't help you.' There was nothing they could do for a small business like mine. They didn't want to talk to me and basically told me that. With the growth of online banking, I don't think I will ever use a regular bank again."
D'Angelo's loan with Kabbage is straight-forward. The initial term was for six months with a monthly flat fee that reduces over the term of the loan. In the end, the fee paid equates to about a 13 percent interest rate. Like a line of credit, the loan can be paid off early without penalty.
"Yeah, that's a higher rate than you would get with a bank, but what good is a lower rate if you can't get the money," says D'Angelo. "With Kabbage, it wasn't just about your business's credit history or your personal credit. It was about your business and its history of revenue. I gave them three months of bank statements and it was done in a matter of days. Even though it was done online, I have a relationship with three or four people at Kabbage."
Like any lending entity, Goldberg said Kabbage has good and bad loans. But the data-based, decision-making process at Kabbage reduces risk, and the efficiency and speed of the loan process has struck a chord with the market Kabbage targets.
"There is no way a bank can make 1,400 loans a day," Goldberg says. "We very much cater to the small business and speak the language of small business. It's great that Jacob values our relationship even though he didn't sit behind a desk at a big branch bank. We pride ourselves on using automation to get the throughput that we need, but we have human beings ready to talk to any customer that needs to talk."
Goldberg said the majority of Kabbage customers "have a handful of employees, have been in business a couple of years and are making a living in their small business." To qualify, Goldberg said, company must have been in business for year and have at least $4,200 a month in revenue for three consecutive months.
"Jacob needed to keep his show on the road," Goldberg says of the Kabbage loan for Rolling J's Mobile Bistro. "We helped him get on the ground again, and from that incident, we built our relationship."
The growth of Kabbage, which includes aggressive marketing on broadcast and digital media platform, reflects the data-driven and automated approach to its underwriting, Goldberg said.
"The regular banking industry is intrigued with us, but that's about it," says Goldberg. "Banks are not really set up or prepared to compete in the small business world. We're really filling a hole the banks won't fill because of the time and money to do it."
The D'Angelos believe they have quickly established a brand that people enjoy and support. The entrepreneurs are confident the sandwich shop will succeed with the development along Riverfront Parkway.
"We are local and have made a name for ourselves in the places we work," D'Angelo says. "We'll get it right."