Barclays Support Lance’s Freelancer Orientated Business Bank Account

https://thefintechtimes.com/barclays-support-lances-freelancer-orientated-business-bank-account/
http://thefintechtimes.com/wp-content/uploads/2021/05/iStock-1224629431.jpg?#

Barclays led Lance‘s seed funding round in which the company was able to launch its business bank account for freelancers and side hustlers. Lance was built by a team of former freelancers based on the insight that the market is still struggling to manage everyday cash flow and income documentation across multiple income streams. They created a bank account to automatically identify deductibles and manage tax withholdings, set aside savings, and pay a monthly salary – all responsive to a freelancer’s typically volatile monthly income. Along with Barclays, other investors in the funding round included BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and other fintech and creative industry angel investors who in turn raised $2.8million for Lance. The funds are intended for further product development and marketing.

The traditional workforce is changing as today there are over 60 million freelancers in the US alone. Covid-19 further accelerated this shift as many full-time employees were laid-off or actively looked for supporting side hustles. The Lance team spent the past year speaking with thousands of self-employed individuals and discovered the savviest are paying monthly surcharges for standard business banking accounts and sometimes multiple accounting software solutions. Despite their efforts to educate themselves and organise their finances, business owners were still having to spend too many resources on these solutions and still weren’t able to surface their 2019 income or easily fill out Schedule C forms for tax filings and loan offerings.

Unlike traditional and other neobanking solutions that still only offer a passive bank account that freelancers have to then manage with accounting software, Lance takes a more active approach. With its business banking account, Lance is able to capture both W2 and 1099 payments and then allocate them at pre-determined and custom settings to subaccounts: one sub account temporarily holds a personal salary before it’s sent out to the account holder’s personal checking account, another holds tax withholdings, and yet another holds back a small amount for savings or profit. Finally, account holders get the benefit of an allocated business expense balance that interacts with their automated tax withholdings. All of these subaccounts, automatic allocation and responsiveness is included in the basic account at no charge. Lance also offers a pro version which account holders can opt into with a $12 per month subscription that then pays the IRS quarterly taxes from the withholdings, pre-populates an anytime Schedule C form and more. The Lance Bank has been estimated to save freelancers 100 hours per year and $7,500 in fees and deductibles.

“It’s time to recreate banking solutions that are mindful of different people’s financial goals,” said Oona Rokyta, CEO and co-founder of Lance. “Lance’s approach brings banking and accounting together in one business account because that’s what solopreneurs need today. They’re already juggling multiple income streams and evolving passion projects. What they need is a financial partner that works alongside their growing ambitions.”

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

https://thefintechtimes.com/barclays-support-lances-freelancer-orientated-business-bank-account/