Toronto-based Float has launched transactional business accounts for small- and medium-sized enterprises (SMEs) as it seeks to offer more alternatives to Canada’s big banks.
“This launch is just the beginning of rethinking what business banking should look like in this country.”
The new product, Float Business Accounts, is the FinTech startup’s first dedicated chequing account, offering zero fees, no minimum balance requirements, and no lock-in to access funds. Float describes the accounts as a mix between chequing and savings accounts, as they offer up to four percent interest.
It’s a new addition to a growing suite of products designed to simplify expense management for SMEs, including corporate cards, accounting services, and expense-tracking software. The launch hints at Float’s broader ambitions of tackling banking services for SMEs, many of whom report feeling underserved by traditional banks in Canada.
“This launch is just the beginning of rethinking what business banking should look like in this country,” founder and CEO Rob Khazzam said in a statement.
The new product integrates with its existing corporate cards and spending software. Though it’s Float’s first chequing-style account, the company also offers high-yield accounts with a similar interest structure: four percent interest on balances larger than $50,000, and 2.5 percent for those below that marker. A Float spokesperson told BetaKit that the new accounts offer additional benefits, such as insurance and the ability to receive funds via electronic transfer and wire transfer.
Andrew Dale, chief operating officer at Float, said that the “radical part” of these new accounts “isn’t the technology or even the market-leading interest rate. It’s that, for the first time, businesses don’t have to compromise.”
Founded in 2019, Float has sought to simplify spending for Canadian companies, particularly SMEs. According to a market report the startup conducted last fall, one in four SMEs reported having inefficient financial processes or systems.
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Khazzam has consistently advocated against fees and restrictions imposed by traditional banks on SMEs. In a Sept. 8 blog post, he argued that clauses imposed by large banks in credit agreements with SMEs “lock” these companies into traditional services and prevent them from using FinTech companies like Float.
“Happy customers [are] forced to close their accounts, not because they lacked value or chose another option, but because their bank decided for them,” Khazzam wrote.
Float claims that more than 5,000 Canadian businesses now use its services, including Cohere, Neo, and Jane Software. The company is registered as a money services business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
Float’s new accounts insure up to $100,000 under the Canada Deposit Insurance Corporation (CDIC), plus 100 percent of funds held in trust accounts. They can hold both CAD and USD funds with cross-border capabilities. In April, Float rolled out a foreign exchange product to help companies doing business in Canada and the US save money during the ongoing trade war. Float FX allows Canadian companies using the platform to convert funds from CAD to USD and vice versa for a 0.25-percent fee—90 percent less than some of the major Canadian banks.
Float, which was last valued at over $200 million USD, closed $70 million CAD in Series B funding earlier this year with Goldman Sachs as the lead investor. The round came less than a year after the startup secured a $50-million credit facility from Silicon Valley Bank to grow its corporate credit offering.