“A company will have a million dollars sitting idle, but it is ten thousand here and forty thousand there across forty accounts at several different banks,” said Stan Markuze, CEO of Balance. “Nobody has time to log into forty portals and move it.”
Balance Cash, a San Francisco real estate treasury and cash management platform, made that case in a June 27 announcement. Its claim: a business that runs through dozens of LLCs can hold a seven-figure idle cash position in aggregate without knowing it. The money sits as small balances in operating and reserve accounts across several banks, and a large share earns little or no interest.
The company says awareness is rarely the issue. Moving funds entity by entity across twenty, fifty or a hundred accounts is simply impractical. Banks add to the trouble, Balance said, because most do not pay competitive interest on business balances unless they are large and concentrated in a few accounts. Sweep features at banks usually work within a single institution. Opening a brokerage account for every entity and shuttling money by hand does not scale either.
How the sweeps work
Balance’s answer is an automated sweep for each entity. Each one moves its excess cash above a target balance into liquid money market funds backed by U.S. Treasuries. The account is opened under that entity’s own tax identification number and is never pooled with other entities or other customers. Each entity keeps its own statements and tax reporting, which the company says matters for accounting, audit and lender purposes. Funds stay available same day.
The platform connects to the banks a company already uses, so no one has to switch institutions. A finance team can start with a handful of entities and expand later.
Balance describes itself as an SEC-registered investment adviser with SOC 2 Type II certification. Assets are held by an independent third-party custodian. The company notes that the investment account is not a bank deposit and is not FDIC-insured.
Who it is aimed at
Real estate is the clearest case, the company said, because each property often sits in its own special-purpose vehicle, with separate operating and reserve accounts and lender rules about where cash must be held. Franchise groups with many locations and holding companies with several subsidiaries face the same fragmentation.
Balance gave one example: a mid-market real estate investor holding several million dollars across twenty or more property-level accounts. No single balance draws attention. Added up, the yield lost over a year is a number the owner notices once it is calculated.
The sweeps are one piece of a larger platform that also offers consolidated, real-time visibility, forecasting and transaction intelligence across every entity and account. “Operators do not want to manage forty logins or run a spreadsheet that is out of date the moment they finish it,” Markuze said. “They want their cash visible and working across every entity. The sweep is the part you feel first, but the visibility is what changes how they run the business.”
The announcement came from the company itself and was distributed through GlobeNewswire. It named no customers.
Sources
- Idle Cash Hiding in Plain Sight: How Multi-Entity Operators Lose Yield to Cash Scattered Across Dozens of LLCs
- Idle Cash Hiding in Plain Sight: How Multi-Entity Operators Lose Yield to Cash Scattered Across Dozens of LLCs
