Linking your bank accounts

Connecting your bank account is a required step in the application process. It allows us to evaluate your business activity, determine an appropriate spending limit, and set up repayment.

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Connecting through Plaid

We use Plaid to securely connect your bank account during the application process. Plaid is a financial technology platform used by companies such as American Express and Venmo to authenticate and verify bank accounts. You can learn more at Plaid.com. When you connect through Plaid:

• We can review account balances and transaction history
• We can assess your cash flow in real time
• We can enable direct debit repayment
• We can proactively reassess your limit as your business grows

Karat does not receive or store your bank login credentials. Because Plaid provides real-time updates, it allows us to set and adjust your spending limit more accurately, often without requiring additional documentation.

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ACH connection (alternative)

You may also connect your account using an ACH link by entering your routing and account number. An ACH connection allows us to pull funds for repayment. However, ACH does not provide access to real-time balances or transaction history. If you request a limit increase while connected via ACH, we may require bank statements to evaluate your request.

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Verifying a manually linked account

After you enter your routing and account number, Karat sends two small test deposits (each under $1) that show up on your statement as ACCTVERIFY. They usually arrive in 1 to 2 business days. While the deposits are pending, the account shows a Needs verification badge in your connections list along with the date the verification window closes. To finish linking the account:

1. Go to Settings > Connections
2. Find the bank marked Needs verification and select the badge to expand the row
3. Enter the two deposit amounts from your bank statement
4. Select Verify

You have two attempts to enter the correct amounts. If the first attempt doesn’t match, the row updates to show one attempt remaining. Two consecutive mismatches fail the account, and you’ll need to link it again to try verification. The account is also failed if your bank doesn’t accept the deposits or reports too many failures. If the deposits haven’t arrived yet, wait 1 to 2 business days and try again. Until you verify it, the account can’t be selected for autopay. See Updating autopay bank accounts.

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Linking additional accounts

You can connect additional bank accounts at any time. To add another bank account:

1. Log into your Karat account
2. Navigate to Settings > Connections
3. Under Bank Accounts, select Add another bank
4. Follow Plaid’s instructions to complete the connection

If your revenue flows across multiple accounts, linking them can:

• Provide a more complete picture of your business activity
• Strengthen your application
• Support higher spending limits
• Reduce the need for manual documentation

Note: Linking the same bank account across multiple organizations If you manage multiple organizations and link the same bank account to more than one organization, Plaid’s duplicate account detection may flag this connection. You’ll see a warning when attempting to link an account that’s already connected to another organization you manage. While you can proceed with linking the same account to multiple organizations, be aware that this may affect how transaction data is shared and could impact underwriting decisions for each organization.

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Troubleshoot bank linking

If your bank is supported by Plaid but fails to connect:

• Try reconnecting at a later time
• Consider linking your account via ACH instead

If your bank previously failed with an “Account not currently supported” message, try linking it again. Karat now requests only the Plaid data it needs, so more institutions can be linked, including banks such as Discover that were previously incompatible. If the issue persists, contact our team for assistance. Plaid connections may occasionally disconnect for security or technical reasons. If your linked bank account shows an error, reconnect it promptly to avoid disruptions to underwriting or payments. We may notify you if a connection issue is detected, and timely resolution is required. If you try to update a connection that Plaid no longer has on its side, Karat shows a Reconnect this bank prompt. Click Connect again to complete a fresh Plaid connection. The old connection is removed from your list automatically once the new one succeeds. See Manage connected bank accounts and social accounts for details. _{Karat is a fintech company, not an FDIC-insured bank. Banking and Card services provided by Grasshopper Bank, N.A., First Internet Bank of Indiana, and Cross River Bank, Members FDIC.}