(Reuters) - Atlanta-based online lender Kabbage Inc said on Wednesday that it will offer checking accounts for small businesses, making it the latest financial technology startup to expand its offering to a broader suite of banking services.
The accounts, which have no minimum balance requirements or maintenance fees, will pay 1.10% annual yield, disbursed monthly, the company said.
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 reel from the economic impact of the novel coronavirus pandemic, which has led many companies to permanently close.
During the pandemic Kabbage has been participating in the Paycheck Protection Program, the government’s small business stimulus program, and has issued 225,000 approved loans for nearly $6 billion, it said.
“Since March, we’ve been focused on delivering these funds to small businesses as the funds can be fully forgiven,” said Kabbage President Kathryn Petralia. “We’re now the third-largest PPP lender in the nation by application volume.”
Kabbage is one of several fintech startups to have recently branched out beyond their core offering, with many seeking to attract customer deposits. Money transfer startup TransferWise said in June that it expects to offer its first investment product in Britain over the next year, while online investment managers Betterment and Wealthfront recently started offering cash or checking accounts.
Kabbage checking account users will be able to deposit cash at a newtork of 90,000 retailers and service centers, and withdraw cash for free at thousands of ATMs across the country, it said.
Reporting by Anna Irrera; editing by Emelia Matarise