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Brex is a relatively new startup that aims to help other startups with no-frills corporate charge cards.
The idea behind Brex, which has the backing of some major tech investors, is to offer startups a corporate card quickly and easily without the need for personal guarantees. When a business is approved, they can get a virtual card in five minutes. The card is geared toward executives of startups of any size.
The Brex card aims to provide better spending limits and easier ways to assign them to employees. Here’s a look at whether it’s a good offer overall.
Getting the Brex Corporate Card
Sign up for a Brex card on the company’s website, where you’ll enter your business’ bank account information. That account essentially underwrites the card. Startups should have at least $50,000 in their business account to qualify.
Once the application is completed, companies get a virtual card. Then, they can then start creating custom limits for employees.
The Brex card is a charge card, so it must be paid off each month. The rolling balance for the card is based on the capital of the startup. The total limit is a percentage of the cash balance a company has available, so there isn’t necessarily an approval process. Instead, it’s just about creating a spending limit based on available money in the bank account of the startup. Spending limits are dynamic as a result.
Credit checks and security deposits aren’t required.
Basic Information: Brex Card Rates and Fees
There is no annual fee with the Brex Card, nor are there interest charges since it is a 30-day charge card with balances paid off each month. There are no foreign transaction fees, either. When someone uses Brex, their first five cards are included with their account. For additional cards, it’s $5 per month per user.
Benefits of the Brex Card
For many startups, one of the primary benefits of the Brex Card is the simple application process. There’s no need to gather extensive financial documents or sign a personal guarantee.
Brex offers its own rewards and signup bonuses, although they’re different from other corporate cards. For example, there is a current signup bonus offering $5,000 in Amazon Web Services credits. There are also opportunities to save on delivery services.
A big perk for Brex cardholders is that it offers built-in expense management. It’s easy for startup executives to see who’s spending what, and to break down expenses by vendor. When using the card, receipt images are sent by text with the option to reply to expense notifications in real-time.
Downsides of the Brex Card
First, with the Brex card, you do need to have money in your business account. You also have to be prepared to meet the requirements of a charge card, meaning the full balance has to be paid each month. The strict repayment policy is the primary downside of this card for startups. If you don’t meet the requirement, your card is canceled. With a traditional business credit card, you can carry a balance. Of course, no balance means no interest payments.
Also, this card isn’t intended as a source of capital. It truly is for day-to-day business expenses.
Another potential downside with Brex are the rewards. There are some rewards currently offered, but they’re not on par with the airline, travel and other high-end rewards you might get with a traditional corporate card.
The Brex Credit Card could be a good spending option for startups with at least $50,000 in their account and that want visibility into spending without a personal guarantee. The Brex Card does have to be paid in full each month, but credit limits are adjustable depending on available capital. The application process is simple and doesn’t require credit reports or financial statements, which can be a major upside for startups.
Author: Jeff Gitlen
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