Brex, a New Credit Card for Small Businesses

A new company called Brex has created a corporate card for startup companies and it claims to be different from the usual cards in the market today. Instead of evaluating applications based on a business owner’s personal credit, it focuses on the funding of the business itself. The company had previously raised $215 million in equity funding at a $1.1 billion valuation. And just a few days ago it secured a $100 million debt financing from Barclays Investment Bank.

Brex, which recently launched a rewards program tailored to startups needs, doesn’t require businesses to provide a personal guarantee or security deposit. The company simplifies corporate expenses by providing companies with a consolidated look at their spending and gives entrepreneurs a credit limit that’s as much as 10 times higher than what they might receive elsewhere.

How is it Different?

With the Brex Card for Startups, there’s no founder liability if the business isn’t successful. You don’t need to provide a social security number, just an employer identification number. But they do require access to the business’ bank information. Brex determines the creditworthiness of a business by evaluating its cash flow, spending patterns and financial backing, rather than the applicant’s own credit history.

Brex’s website says that credit limits are based on factors such as the money a business has raised and its spending patterns. This could result in much higher limits for some business.

Earning Rewards

Brex’s rewards program lets cardholders earn points on their purchases. Here’s what the earning rates look like:

• 7 points per dollar spent on rideshares and taxis.
• 4 points per dollar on Brex travel (flights, hotels, and even Airbnb stays)
• 3 points per dollar on restaurants
• 2 points per dollar on recurring software expenses.
• 1 point per dollar on all other purchases.

Rewards can be redeemed at a value of 1 cent per point as a statement credit against a transaction made on the card. So the card really gives you the best rate out there on rideshares and a good rate on restaurants and travel.

Transfer Brex Rewards to Travel Partners

Instantly use your points to pay for any travel needs, like airfare, hotels, or Airbnb. You can also transfer these rewards to travel partners:

• Aeromexico Club Premier
• Air France/KLM Flying Blue
• Avianca Lifemiles
• Cathay Pacific Asia Miles
• JetBlue TrueBlue
• Qantas Frequent Flyer
• Singapore Airlines KrisFlyer

Signup Bonus

There’s no sign-up bonus, but Brex offers cardholders deals and discounts at various vendors that startups may find appealing, including Amazon Web Services, WeWork, Google Ads, Salesforce, Twilio, Caviar, Instacart, Zendesk and Snapchat.

• Amazon Web Services, $5,000 in credit over a year
• Up to $150 in Google Ads credit.
• Up to 15% off list price for 6 months for any new U.S. office space with We Work
• Carta, 20% discount on first year subscription and waived implementation fees
• Salesforce, 25% subscription discount, up to $375
• $500 in Twilio credits to be used over 1 year
• Zendesk, $436 credits/month for 12 months
• Zoom, 20% discount on annual subscription
• Instacart, $35 off 3 orders of $75 or more
• LEARN MORE

You can check out their website here.

Guru’s Wrap-up

This looks like a promising products for small businesses with the best rate out there on rideshares at 7x and also 4x on travel and 3x on dining. It has no annual fee and doesn’t require businesses to provide a personal guarantee or security deposit. It doesn’t look like a product for churners, but could be useful for business, especially those who can make use of the many discounts it provides during the first year. Let’s see if it lasts.