The launch expands Kabbage’s capabilities beyond just lending and moves the company closer to being a full-service financial services provider.
It is also a step towards helping small businesses access banking services that have been traditionally out of reach.
“Small businesses have always struggled to get basic financial services from their banks, both in the best of times and worst of times, and the PPP only exacerbated that divide,” Kabbage co-founder and President Kathryn Petralia said in an emailed statement to Hypepotamus.
“Since we began building Kabbage Checking over a year ago, we wanted to offer a full-service business checking account designed to serve the smallest of businesses. It gives them the banking advantage large businesses enjoy, but without the start-up fees, monthly fees, maintenance fees or overdraft fees—and instead, we pay them so they can better manage and grow their money,” Petralia added.
Checking accounts are FDIC-insured up to $250,000 and backed by Green Dot Bank. There is no minimum balance requirement or monthly fees, no ATM withdrawal fees at 19,000 in-network ATMs. Customers will earn 1.1% yearly yield on the account as well.
Accounts can also have up to five individual wallets, or sub-accounts, to help better manage business saving and spending goals.
Kabbage Checking accounts are the latest in the company’s suite of financial tools designed to make funds more accessible to entrepreneurs and early-stage business owners. In 2018 Kabbage launched the Kabbage Card, which provides flexible capital opportunities for companies more than a year old.
“We believe in the businesses too often left out, overlooked and underestimated,” said Kabbage President Kathryn Petralia in a statement regarding the launch of Kabbage Checking. “Kabbage Checking is a new banking service built to give those small businesses an upper hand to earn more, save more and grow their business faster without sacrificing anything they expect from a bank.
While there is currently a waitlist to open an account, businesses do not have to be current Kabbage lending customers to qualify.
Kabbage’s platform and key services have helped almost 210,000 companies weather COVID-related economic uncertainty. According to a report released by the company on June 30, Kabbage is the third largest Paycheck Protection Program (PPP) lender by volume, behind only Bank of America and JP Morgan Chase.