LiaFi Platform Addresses Traditional Banking Trade-offs for Business Owners

Audio By Carbonatix

ELIZABETHTOWN, Ky.--(BUSINESS WIRE)--Oct 28, 2025--

For decades, small business owners have often faced an uncomfortable choice: keep operating cash readily accessible in business checking accounts earning an average of just 0.07% annual percentage yield (APY)¹ or move funds into higher-yielding savings accounts that complicate daily operations.

LiaFi has created a third solution which can resolve that trade-off. The Fintech app and platform, in partnership with Magnolia Bank, enables businesses to earn 2.50% APY on surplus operating cash while maintaining their existing banking relationships and full operational flexibility. By separating yield optimization from business checking account transaction processing, LiaFi solves what founder Bruce Hrovat calls "the accessibility-versus-yield dilemma that has constrained small business cash management since Regulation Q was repealed in 2011."²

The Historical Trade-off

Traditional banking products often required businesses to make an either-or decision. They could keep funds in business checking accounts where money remains instantly accessible for payroll and vendor payments but earns an average of just 0.07% APY. Or they could move cash into savings accounts or money market accounts that offer better yields but often come with conditions such as introductory APYs, minimum balances, and transaction limitations.

"Business owners weren't making bad decisions by leaving cash in checking accounts," says Hrovat, who spent 30 years in banking operations before founding LiaFi. "They were making a practical choice to keep their business running smoothly, even if it meant earning minimal returns on their cash."

The result has often been substantial amounts of small business earning minimal returns such as 0.07% APY on operating cash throughout the month.

The LiaFi Solution

LiaFi's platform and app are designed with the aim to fundamentally restructure how businesses approach surplus cash management throughout the month. Businesses can maintain their primary transaction accounts exactly as they always have. They can stay with the same bank, same bill-pay systems, and same vendor relationships. Nothing about their day-to-day banking changes.

But between payment cycles, typically on the 15th and 30th of each month, when cash accumulates beyond immediate operational needs, businesses can allocate those idle funds to the LiaFi Business Account, with deposits FDIC insured through Magnolia Bank, Member FDIC, where funds earn 2.50% APY.

"Most businesses keep more cash sitting around than they actually need for day-to-day operations," Hrovat explains. "That extra money is an opportunity and should be put to work."

Consider a typical pattern for small business cashflow: A business receives customer payments in the first half of the month, and cash accumulates in transaction accounts until payroll and vendor payments process mid-month. Then the cycle repeats. With LiaFi, that accumulated cash earns 2.50% APY between payment cycles, then can be moved back to the operating transaction account when needed for transactions.

The Financial Impact

The financial impact is clear: earning 2.50% APY on surplus cash instead of 0.07% in traditional transaction accounts can create meaningful interest for small businesses—interest that could help fund software subscriptions, marketing initiatives, professional development or equipment upgrades.

"This isn't about timing the market or taking risks," Hrovat emphasizes. "It's about earning a return on money you already have."

Preserving Banking Relationships

One of LiaFi's core design principles is preserving existing banking relationships rather than disrupting them. Switching primary banking relationships carries substantial operational cost: updating vendor payment information, reconfiguring accounting software, and training staff on new systems. For most small businesses, these switching costs can exceed the incremental interest they'd gain by moving banks.

LiaFi eliminates this barrier by working alongside existing banking relationships. The primary transaction account remains at the business's current bank, while LiaFi simply provides a better destination for surplus cash between transaction cycles.

"We're not asking businesses to choose between their current bank and better yields," says Hrovat. "With LiaFi, they can have both."

When the Dodd-Frank Act repealed Regulation Q in 2011², it eliminated regulatory barriers to banks paying interest on business transaction accounts. Fourteen years later, the average business transaction account still pays 0.07% APY. By unbundling yield optimization from transaction processing, LiaFi delivers what Regulation Q repeal theoretically enabled: businesses earning meaningful returns on operating cash without sacrificing accessibility.

The choice is no longer constrained to choosing between accessibility and yield. With LiaFi, businesses have the opportunity to simply choose both.

About LiaFi

LiaFi helps small business owners earn more on idle cash and take control of their cashflow. Backed by Magnolia Bank, LiaFi combines secure connectivity, real-time insights, and flexible tools so entrepreneurs can keep their money working without added friction. Learn more at www.liafi.co.

Citations:

¹ Federal Deposit Insurance Corporation, National Rates and Rate Caps: Business Savings and Interest Checking Accounts, data as of October 20, 2025. Available at https://www.fdic.gov/national-rates-and-rate-caps

² Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, §627 (2010), repealing Regulation Q prohibition on interest-bearing business transaction accounts, effective July 21, 2011

*LiaFi is not a bank. Banking services provided by Magnolia Bank, Member FDIC.

**Transfer timing depends on the payment rail and bank cutoff times. Typical ACH transfers take 1-2 business days.

***Annual Percentage Yield. Current rate as of today. This is a variable rate account, and the rate may change after the account is opened. Rates are subject to change at any time.

View source version on businesswire.com:https://www.businesswire.com/news/home/20251028945763/en/

CONTACT: LiaFi

Email: [email protected]

KEYWORD: KENTUCKY UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: BANKING ACCOUNTING TECHNOLOGY PROFESSIONAL SERVICES PAYMENTS BUSINESS SMALL BUSINESS APPS/APPLICATIONS SOFTWARE FINTECH FINANCE

SOURCE: LiaFi

Copyright Business Wire 2025.

PUB: 10/28/2025 06:41 PM/DISC: 10/28/2025 06:41 PM

http://www.businesswire.com/news/home/20251028945763/en