Kabbage launches checking account for small businesses

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The online lender Kabbage said Wednesday it's adding a checking account to the cash management tools it offers small businesses.

Kabbage Checking targets companies with fewer than 20 employees. It does not charge monthly maintenance or overdraft fees and pays a 1.1% rate on all balances. Customers can also pay bills, set aside amounts for savings or other needs (such as quarterly tax payments) in up to five “wallets” and deposit cash at retailers in the Green Dot network. Kabbage holds deposits at Green Dot Bank in Pasadena, Calif.

The product launch is part of Atlanta-based Kabbage's natural evolution over the last few years, according to co-founder Kathryn Petralia.

“We believed a checking account was the glue that holds it all together," says Kabbage co-founder and president Kathryn Petralia of the online lender's product lineup.

“We got our start with small-business lending and lines of credit, but we’ve been launching other products over the last couple of years to help customers manage cash flow, such as payment acceptance and invoicing,” Petralia said. “We believed a checking account was the glue that holds it all together.”

A small-business owner does not need to be an existing Kabbage customer to join. Kabbage targeted existing and new customers in an early-beta phase. But customers can use other Kabbage products in tandem with their checking accounts.

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For example, Kabbage will apply the same cash-flow analysis to checking accounts as it does to other accounts and suggest the best uses of these funds with Kabbage Insights. Users can receive funds directly to their checking accounts when using Kabbage Payments and access lines of credit through Kabbage Funding.

Remote check deposit and wire transfers are in the works for later this year.

Kabbage has a total of 400,000 customers.

Its other recent initiatives include online lending to processing Paycheck Protection Program loans and an app that lets Uber drivers apply for PPP loans from their phones.

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Commercial banking Small business Digital banking Online banking Marketplace lending Paycheck Protection Program Digital Banking 2020 Kabbage