Tuesday, June 17, 2025
How to Position Your Business for Funding If You Use a Fintech Bank
How to Position Your Business for Funding If You Use a Fintech Bank
If you're a growth-minded business owner using platforms like PayPal, Chime, or Shopify Balance to manage your finances, you're not alone. These tools offer speed, flexibility, and modern convenience—but they also present unique challenges when you're seeking funding from private lenders.
This article will help you understand how fintech banking affects your fundability, what lenders look for, and how to proactively position your business to get approved.
What Are Fintech Banks?
Fintech banks—like PayPal, Chime, and Shopify Balance—are digital platforms offering banking-like services. They're popular with small business owners because they make it easy to:
- Accept payments
- Store funds
- Pay vendors
- Track expenses
However, fintechs typically operate through banking partners, may lack traditional account features, and often don't provide the documentation lenders require for underwriting.
What to Expect When Applying for Funding
Using a fintech platform doesn't mean you can't get funding—but it does mean you'll want to understand how lenders view these accounts and prepare accordingly.
1. Lenders Prefer Traditional Bank Statements
Most lenders need to see 3–6 months of official business bank statements from a FDIC-insured institution like Chase or Bank of America. Platforms like PayPal or Shopify may offer downloadable data, but it's not always accepted by underwriters.
As noted by GDS Link, these platforms don’t always align with tools lenders use like Plaid, which can slow down—or stall—the application process.
2. Fintech Accounts May Lack Business Structure
Some platforms, like Chime, are designed for personal use only. If you're using a personal account for business deposits, that could raise concerns.
Lenders want to see separation between personal and business finances, typically through a business checking account tied to your company’s EIN. Grasshopper Bank outlines why legacy institutions expect formal business accounts.
3. Risk Concerns Around Freezes and Fraud
Fintech platforms have had incidents involving account freezes or delayed payouts. If your entire cash flow is routed through one of these platforms, that risk extends to your ability to repay a loan.
A Forbes article highlights why some lenders and merchants are cautious about fintech-only financials.
4. Higher Default Rates Influence Perception
According to a Harvard Business study, borrowers using fintech accounts are statistically more likely to default—even if their businesses are performing well. Lenders factor this into their risk scoring models.
How to Strengthen Your Funding Profile
If you're using a fintech bank, you don’t need to overhaul your setup—just make a few key adjustments to align with lender expectations:
✅ Open a Traditional Business Bank Account
Make sure it’s registered in your business name with your EIN. Even if you love your fintech tools, this will serve as your main account for underwriting purposes.
✅ Run Deposits Through the Business Account
Ensure your revenue flows through the business account consistently. You can still transfer funds to or from your fintech platforms—but the lender wants to see activity on your core business account.
✅ Keep It Clean and Consistent
Avoid using the account for personal expenses. Lenders prefer 3–6 months of clean, predictable financial history when reviewing an application.
✅ Use Fintech Platforms as Tools, Not Foundations
Platforms like Shopify Balance and PayPal can be useful—but don’t rely on them as your only bank.
A Note on Lender Technology
Most lenders use software like Plaid or DecisionLogic to automatically pull and verify your bank activity. If your fintech account isn’t supported, that can delay your approval or lead to a decline.
Some platforms simply aren’t readable by lender systems, which forces manual review or disqualification. This is why traditional banks remain the preferred choice for business banking when funding is a priority.
"Even strong businesses get denied because their financial setup doesn’t match lender expectations."
Final Thoughts
Fintech platforms are here to stay—and they offer tremendous value to small businesses. But when it comes to funding, structure matters.
If you’re preparing to apply for working capital, take time to align your banking setup with how lenders evaluate risk. Having a proper business bank account isn’t just a formality—it’s a core part of your fundability.
📌 Funding Readiness Tip
Planning to apply in the next few months? Start building 3–6 months of consistent deposit history today.
Need help? Call us today and we’ll walk you through what lenders want to see—before you apply.
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