Karat Financial, a fintech company known primarily for offering credit cards tailor-made for content creators, is now launching its own dedicated business banking services for this same demographic. Partnering with digital bank Grasshopper, Karat sees the business banking platform as a logical evolution of their successful Visa credit card offering focused on the creator economy.
The company, now six years into its journey, continues to tackle the exact problem it originally sought to address: the financial infrastructure available to online creators typically falls far short of their needs. According to Karat’s co-founder and co-CEO Eric Wei, creators face constant frustration when undertaking what should be straightforward tasks—like applying for business credit cards or even opening bank accounts—despite commanding robust, successful businesses.
There are striking examples highlighting these financial hurdles. Creators who generate annual revenues reaching into millions have been refused routine retail transactions. Wei cited William Osman, a YouTuber boasting over three million subscribers, who unexpectedly faced difficulties securing a six-figure credit line necessary to host the Open Sauce convention event. Karat intervened, offering Osman the requested credit, demonstrating, in Wei’s words, “a no-brainer” decision that points to traditional institutions’ persistent misunderstanding of the creator business model.
As of today, Karat has already provided over $1.5 billion in credit, with average individual limits of roughly $25,000 per creator. Yet, in conversations with creators, Karat recognized a broader demand for more comprehensive financial offerings beyond credit. “We’re no longer just working with YouTubers who say, ‘Oh my god, what are taxes?'” Wei explained. “We’re also serving established entrepreneurs who can’t understand why they are still treated poorly by traditional banks.”
In response, Karat has structured two business banking tiers. The first is a free checking account that includes automated tax planning features, particularly useful for creators, most of whom operate as independent contractors obligated to closely manage tax preparation throughout the year.
The second tier serves as a premium option priced at $20 monthly or requiring a $35,000 minimum account balance. This premium service includes competitive checking account interest rates (with annual percentage yields between 2% and 3%), fee-free wire transfers, and higher-touch customer support. Wei expressed Karat’s unique attention to detail, noting that since the creator economy is inherently unpredictable, creators often prefer holding more significant sums in checking accounts, thus warranting meaningful yields that traditional banks seldom provide. Karat’s role also involves educating its banking partners about the profitability and stability of creator customers, improving broader awareness within the financial industry.
Looking forward, Karat envisions expanding its suite of financial services even further to support creators where traditional financial institutions have hesitated. Among future considerations is the potential introduction of insurance products, including healthcare, aimed specifically at assisting creators’ businesses. Ultimately, Wei sees Karat’s ambition clearly: “We want to rebuild a sturdy financial safety net designed exclusively for those who earn their livelihoods independently.”
