Lili Banking Review 2022: Banking for Freelancers

As a small business owner, you will need to make many important financial decisions. In the early stages, one of the most important decisions you’ll make is which banking platform you use to manage your ongoing financial needs.

The alternative banking movement has created an exciting movement away from traditional banking options. Currently, there are many alternative banking platforms available to choose from, including Lili.

What is Lili Banking?

Lili is a banking platform that has been created for freelancers and independent contractors. With low costs, freelancer-focused tax features, and an easy-to-use platform, Lili has gained the attention of many independent workers who used to conduct business via more traditional banks.

Lili Banking Features

Lili highlights several key features on its website. These features, hand selected to be used by freelancers, include:

•   Visa business debit card: the card comes with no account fees and also has no minimum balance requirements
•   Expense management tool: this free feature makes it easier to categorize expenses and prepare for crucial tax deductions
•   Tax bucket: this feature helps freelancers set aside a specific amount of their income for holding and also estimate their future tax obligations
•   Cashback: at participating vendors, users can get up to three percent cash back on both personal and business expenses
•   Automatic savings: Lili includes a one percent APY with its savings account, which is higher than many other comparable platforms

Customer Service

Lili’s customer support team can be accessed via email, Monday through Friday, from 9 AM to 7 PM EST. Support can also be accessed through the app. There are no physical branches available for Lili users. Generally speaking, Lili’s customer service is somewhat limited, though this is fairly normal for these types of platforms. However, while customer service is average, the platform does include quite a bit of useful resources for freelancers, independent contractors, and other similar types of professions. The Freelancer’s Guide, for example, helps non-traditional workers learn more about the financial challenges that are unique to their industry. 

Ease of Use

Creating a Lili account is fairly easy. According to the company, “All you need is your SSN and 3 minutes.” The company also points out that creating a Lili account does not affect your credit score, something that many people worry about when creating a new account. The platform itself has a straightforward user interface that makes it easy to use the platform’s various financial management tools. This includes the getting paid early feature, automatic savings, mobile banking, tax tools, and more.

App Integrations

When compared to other small business digital banking platforms, Lili’s app integrations are limited. The app can be linked to some other platforms, including CashApp, but the integrations are usually limited to data transfers. Lili’s integrating features are certainly sufficient for some freelancers but lack the depth that more financially complex businesses need.

Target Audience

Every feature offered by Lili is designed for freelancers and independent contractors. The company wants to help provide realistic, low-cost banking solutions to a large group (about 36 percent of the US’s working population engage in some sort of freelance work) that is typically overlooked by bigger banks. Lili is not designed for large-scale corporations but is designed for users that have limited cash flows and straightforward banking needs.

Lili Banking Pricing

A Lili bank account has no monthly fees and no account minimums, which makes it different from many other alternative banking options for small banks. Additionally, there are no overdraft fees—at Chase Bank, for example, an overdraft fee is typically $34. 

Lili’s lack of fees makes it a very appealing option for freelancers and other professionals who are operating with a very tight budget. However, there are also several strict limits that are not found on other banking platforms. These limits include a mobile check deposit limit of $2,000 per day (sum of all checks), a cash withdrawal limit of $500 per day, and a debit card purchase limit of $3,000 per day. When compared to other options, such as NorthOne, BlueVine, and Mercury, these limits are among the most restrictive.

Monthly Service Fees

Lili’s bank account includes no monthly service fees, which makes it different from some banking alternatives.

Account Opening Fees

There is no account opening fee for a Lili bank account, nor are there any minimum account opening requirements. It is possible to create a Lili bank account with just your social security number (no initial funds are needed).

ACH Payments

According to the company’s website, “All ACH transfers to and from your Lili account are free.” However, users will still need to make sure they are abiding by the company’s strict daily limits. 

Wires

Lili does not allow its users to make any wire payments. However, it does allow its users to make unlimited wire deposits without any associated fees. 

Lili Banking Pros and Cons

As is the case with all mobile banking platforms, Lili will have both benefits and drawbacks. Whether Lili makes sense for your small business will depend on the nature of your business and your current financial needs.

Pros

Some of the platform’s benefits include:

•   No Fees: the platform offers no fees, no minimum balance requirements, and no minimum opening deposits
•   Financial Toolkit: Lili features several useful tools designed for freelancers, including freelancer-oriented tax tools
•   Access to Additional Networks: access to the MoneyPass network allows users to avoid some ATM fees, while access to the Green Dot network allows Lili users to make cash deposits
•   Free Transactions: Lili users can make an unlimited number of transactions each month without needing to pay any fees
•   Accelerated Payment: when set up correctly, Lili users can receive direct deposit payments two days earlier than scheduled
•   Made for Freelancers: Lili was designed to specifically address the common challenges and headaches faced by freelancers, independent contractors, and other individuals

Cons

On the other hand, Lili also has its share of drawbacks:

•   Mobile Limited: there are no physical branches for Lili, which some business owners find problematic
•   Limited Transactions: Lili has very strict daily transactions limits, including mobile check deposits ($2,000 per day), cash withdrawals ($500 per day), and debit card purchases ($3,000 per day).
•   Limited User Base: though designed for freelancers, creating a Lili account requires a Social Security Number, rather than an Employer Identification Number. This prevents some small business owners from establishing a financial footprint that is independent of their personal finances.
•   Limited Features: in terms of app integration, API, and other desirable features for businesses, Lili is lacking. Lili is a very simple platform, which can be considered either a good or bad thing for some business owners.

Overall, these pros and cons help create a clear target audience for Lili:

Who Lili Business Checking is Best For

Lili is a great platform for freelancers who want to create a separate bank account for their enterprise. Freelancers are often overlooked by larger banks and Lili’s interface, features, and platforms are designed to address these oversights. Lili’s lack of fees also makes it a financially feasible option.

Who Should Reconsider Using Lili

Lili is great for many freelancers, but there are still some people who might want to reconsider signing up. These include businesses that:

• Have a complex ownership or business structure
• Are planning on expanding beyond a freelance or independent contractor within the next calendar year
• Use an employer identification number (EIN), instead of a social security number
• Prefer to use a physical location for their banking needs
• Have high levels of cash flow (more than $2,000 per day in check deposits)

Conclusion

There are many banking platforms available for freelancers to choose from. Lili, however, was designed specifically for them, which is why the company has continued growing over time. Lili has a low-cost, straightforward platform. As long as users are willing to abide by Lili’s daily transaction limits and limited number of features, it may be an appealing option. However, we encourage all readers to explore multiple banking options before making any final selections.