If you are an independent contractor or freelancer looking for a single platform to run the financial side of your business Lili is worth checking out. With no account fees or minimum balance requirements, and tools to help freelancers manage their business finances, it can be a solid choice.
Learn what Lili offers, and find out if it’s right for your business.
What is Lili?
Lili is an online business bank account designed for freelancers and independent contractors. It offers a number of features designed to make it an all-in-one solution.
Lili is not a bank, but is sponsored by Choice Financial Group, member FDIC. Deposits are FDIC insured.
Lili Banking Overview
Upon signing up for a Lili bank account, either online or through the mobile app, you will have access to all the free features in Lili including the Lili Visa Debit Card with no fees on withdrawals at MoneyPass ATMs.
Lili offers integrations with payment apps such as PayPal, Venmo and Cash App. If you earn money from online platforms such as Uber or Lyft, or Shopify, you can set up direct deposit for those payments, and you may be able to get paid up to two days faster than with traditional banks.
Lili seems to be aware of the tax headaches sole proprietors face, and has developed several tools to help alleviate this pain point.
You can scan receipts, and categorize business expenses quickly and easily in the app using the tool it calls “Write-Off Tracker.” You can choose how much to set aside for estimated tax payments through a feature called “Tax Bucket.”
You can access quarterly and annual expense reports in your account as well. You can even open an Emergency Bucket savings account.
Upgrade your Lili account from Standard to Pro for a monthly fee of $4.99 to gain access to additional tools. Lili Pro customers may be eligible for BalanceUp, which provides up to $200 in debit card overdraft protection at no additional cost.
Other Pro features include free invoicing, a business savings account with 1% APY, advanced real-time expense management and categorization tools, a Premium Visa Business Debit Card with cashback rewards at select partners, and higher limits on certain types of transactions including higher daily spending limits.
Lili Pro customers can get a prefilled 1040 Schedule C Tax Form to share with their accounting professional.
What Kinds of Small Businesses is Lili Best For?
Lili is available to sole proprietors and single-member LLCs. The majority of small businesses in the U.S. fall into those categories. It can be an excellent choice for freelancers and independent contractors who want to separate their business and personal finances.
In addition, the tax and tracking features are aimed at freelancers and independent contractors. Businesses that already use other expense tracking or tax software may not need these features.
Pros and Cons of Lili Business Banking
There is no single best business bank account for every type of business, of course. Here are some of the benefits and drawbacks of Lili Business Banking:
- No minimum balance requirements
- Fee-free in network ATM withdrawals
- No monthly fees (standard accounts)
- No hidden fees
- Robust mobile app
- Expense tracking
- Online only, no branches
- Some features only available in Pro at $4.99/month
- No business credit card offered
- Limited offering for small businesses with employees
How Lili Banking Works
Lili banking works very similarly to other online banking platforms, but with some unique features. You start with a checking account to receive direct deposit and mobile check deposits, and a business debit card for purchases and expense tracking. Beyond that you can save toward taxes, categorize expenses, and more.
Unlike traditional banks which usually offer bricks and mortar branches along with an online banking option, Lili is only available through mobile banking. This means you need a phone with an IOS or android compatibility to download the app since that will be how you access your account.
To open an account you’ll need to supply your email address, name and address, phone number, date of birth and Social Security number. By law banks must verify customer identities. Opening a Lili account will not impact your credit score.
Your account is registered under your name but you can add your business name or DBA to your account.
You’ll get a Digital Lili card as soon as your account is approved, and a physical will be mailed to you. You can also set up your Lili Card for Google Pay or Apple Pay.
How Lili Compares
Lili’s free business checking account with no minimum deposit requirement has strong appeal for freelancers, independent contractors and small business owners in the startup phase or with fluctuating cash flow. It is clearly targeting a specific audience with banking services they need.
Its robust mobile banking app will be particularly appealing to those used to operating their business on other mobile apps, such as rideshare or delivery apps.
It’s also easy to qualify. Unlike some business bank accounts, you don’t need to provide extensive documentation of the business, or have been in business for a certain period of time.
On the other hand, it may not offer the full range of financial services needed by other growing small businesses, however. Limits on cash and ACH outbound transfers, for example, may not be sufficient for growing businesses. In addition, businesses with significant cash deposits prefer a bank with physical locations for making those deposits, rather than relying on ATMs.
Lili does not accept deposits in foreign funds or checks drawn on banks outside the US, so this may not be the best choice for digital nomads who earn income outside the US.
And at the moment it doesn’t offer small business loans or a small business credit card.
If you are a freelancer or independent contractor, or a startup small business owner operating as a sole proprietor or single member LLC, Lili should be on your list of banks to consider.
Compare it to other small business bank accounts in Business Checking Marketplace to determine whether it’s the best fit for your business.