Lili Review 2022: Business Banking For Freelancers

Freelancers are used to the feast or famine nature of inconsistent income. Keeping costs low isn’t just an option -- it’s a must. 

Lili has built a checking account product designed to be freelancer-friendly. It offers great expense management, tax savings, and reporting features. And its Standard account comes with no monthly fee. 

But does Lili offer enough freelancer-specific features that you should consider switching from your current business checking provider? Let’s find out.

Who Is Lili?

Lili is a banking fintech that is oriented toward freelancers and small business owners. It was founded in November 2018 and is based in New York City. Its founders are Lilac Bar David and Liran Zelkha. Lili has raised $25 million.

"We believe the future of work is freelance, and as the pandemic has recently changed everything about how people approach their careers, the American workforce’s shift toward independence has accelerated even faster than we anticipated." said Bar David.

Bar David says that Lili has seen exponential growth in demand over the past few months. She believes the reason for this is that more people are looking for banking solutions that are tailored to independent, freelance business owners.

What Do They Offer?

After you sign up for Lili, you'll download the mobile app to manage everything. If you prefer to use Lili's website, you're out of luck.

If we consider that most freelancers are working on a desktop or laptop, they're likely logging into their banking account from a browser on one of those computers. If that describes you, transitioning to mobile-only management may feel like a rather limiting change.

Deposits And Payments

Each checking account comes with a Visa business debit card. Some people may balk that there isn’t a business credit card. However, Lili is a checking account product so providing an accompanying debit card makes sense. From the mobile app, you can freeze or unfreeze the debit card.

Like other banks, Lili's customer get a routing number so that they can set up direct deposit with their clients. But where Lili shines is in the delivery speed of those deposits. It says that its customers receive direct deposits up to two days earlier than they would at a traditional bank. Right now, you can't deposit more than $50,000 per month into your account, but the Lili team says that it has plans to increase these limits soon.

Plus, Lili provides cash deposits through leading retailers (approximately 90,000 locations) and users can connect their existing payment apps (Venmo, CashApp, Paypal) and online platforms (i.e, Fiverr, Upwork) to Lili to receive payments directly into their bank account.

One area that is disappointing is mobile check deposits. The feature is available in the mobile app, but you'll need to have at least $200 coming into your account every month to access it.

This may not be a hurdle for some freelancers. But others will need to figure out a way to get that first $200 into your account per month without making a mobile deposit. One potential solution would be to start depositing any paper checks after your first digital payment arrives.

Freelancer Benefits

Where Lili really benefits freelancers is in its reporting and tools. It's why we name it a great tool for business budgeting.

Each time you use your Lili debit card, the transaction will appear inside the app. Then, by just swiping left or right, you can categorize each expense as "personal" or "business."

In addition to simplifying expense categorization, Lili offers reporting for expenses, taxes, and financial insights. This is more than what you'll find on standard checking accounts.

Many small business owners may pay for financial management software that provides these reports for them. So if Lili’s free reporting is able to provide the same features that you’re getting from your accounting software, you may be able to cancel your software account and reduce your expenses.

Beyond the reporting, Lili has a great tax saving tool which allows you to automatically set money aside for taxes on every income, and an Emergency Bucket, which helps users set money aside for emergencies with daily deposits of small amounts. For example, you can set a fixed daily amount, as little as $1 a day, to save for emergencies.

For freelancers who may not know how much to save for taxes (or forget altogether), this can be a lifesaver at tax time. And Lili says that it will soon be able to generate Schedule Cs for its account holders too.

Related: Tax Deductions For Your Online Business Expenses

Mobile App

Lili’s mobile app is how everything is managed. You start the new account process on Lili’s website then transition to the app. There isn’t currently any account management available on Lili’s website.

Thankfully, the app is well designed and easy to use. In my test of the app, I didn't feel hampered in any way by the lack of desktop access.

Perhaps if I had been testing out some of Lili's more detailed reports, I may have felt more limited. However, it should be noted that Lili's reports are downloaded in PDF, CSV or EXCEL formats and you can email them to yourself to be viewed on desktop.

Lili Pro

Lili recently announced that it would be adding a new subscription-based account level called Lili Pro. In addition to the benefits listed above, Lili Pro offers:

• Cashback rewards at over 14,000 merchants
• Savings account with up to 1% APY (see how it compares to other Business Savings Accounts here)
• Unlimited invoicing
• Fee-free overdraft of up to $200
• Advanced expense tracking

However, you will be charged a monthly fee if you decide to upgrade to Lili Pro. Currently, Lili Pro costs $4.99 per month. 

Check out Lili Pro here >>

Are There Any Fees?

Lili is about as close to a no-fee bank as you'll find. With Lili Standard, you won't be charged any of the following fees:

• Monthly maintenance
• Returned item
• Stop payment
• Deposit item returned
• Funds transfer
• Inactive account

It appears that the only fees you could pay with a Lili Standard account are related to ATM usage. The out-of-network ATM fee is $2.50 per use and out-of-U.S. fee is $5.00 per use.

As previously mentioned, Lili Pro costs $4.99 per month and includes free overdrafts for up to $200. Lili calls this Pro benefit "BalanceUp." However, it's unclear if overdrafts are even allowed with Lili Standard accounts, and if they are, what fees are charged when they occur.

How Do I Open An Account?

You can visit the Lili website to open an account. It only takes about 3 minutes.

The company recently announced that support is coming for Single Owner LLCs. So if you're a sole proprietor who incorporates as a Single Owner LLC, you'll soon be able to open a Lili account using your business details.

Once you complete the application on the website, you’ll download the mobile app to begin using Lili. Your Visa debit card should arrive within 10 business days, but you can start using your digital debit card immediately.

Is My Money Safe?

Yes, Lili uses bank-grade encryption and deposits are FDIC-insured up to $250,000 for each depositor through its partner bank Choice Financial Group.

You can also freeze and unfreeze your debit card at any time. Additionally, you can receive real-time transaction notifications.

Is It Worth It?

If you're a freelancer who already prefers to do your banking on your phone, Lili could be a good choice. It charges low to no fees and offers expense categorization and tax reporting tools that you'd typically need to pay separately for.

However, if you're looking to earn rewards or interest, you'd have to upgrade to Lili Pro which costs $4.99 per month. For those priorities, other business checking accounts like LendingClub Bank's Tailored Checking, Novo, or Azlo may be more affordable choices.

See all 10 of our favorite business checking accounts for small business >>>

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