Online lender Kabbage launches checking accounts for small businesses
(Reuters) – Atlanta-based online lender Kabbage Inc said on Wednesday it would offer checking accounts to small businesses, making it the latest fintech startup to expand its offering to a wider range of services banking.
The accounts, which have no minimum balance requirements or maintenance fees, will pay 1.10% annual return, disbursed monthly, the company said.
The Kabbage checking accounts will be issued by partner bank Green Dot Bank, a member of the Federal Deposit Insurance Corporation and are insured up to $ 250,000, the company said.
The launch comes as small businesses across the country recover from the economic impact of the novel coronavirus pandemic, which has led many businesses to shut down permanently.
During the pandemic, Kabbage participated in the Paycheck Protection Program, the government’s small business stimulus program, and made 225,000 loans approved for nearly $ 6 billion, he said.
“Since March, we have focused on providing these funds to small businesses, as the funds can be fully forgiven,” said Kabbage President Kathryn Petralia. “We are now the third largest PPP lender in the country in terms of request volume.”
Kabbage is one of several fintech startups to have recently branched out beyond their core offering, with many looking to attract customer deposits. Money transfer start-up TransferWise said in June that it plans to deliver its first investment product in Britain within the next year, while online investment managers Betterment and Wealthfront have recently started offering cash accounts or checking accounts.
Kabbage checking account users will be able to deposit money into a new network of 90,000 retailers and service centers, and withdraw money for free at thousands of ATMs across the country, he said.
Reporting by Anna Irrera; edited by Emelia Matarise