Guide to Brex: The card for startups

Perhaps your business is so new that you haven’t been able to form a substantial business credit score yet. If so, how do you get a business credit card when your business is so new?

Until recently, the answer has mostly been — you can’t. You’d have to charge expenses to your personal credit card and figure out the accounting on the back end.

Brex Inc. endeavored to solve this issue and now its Brex Card ranks as one of the best business credit cards out there. Issued by a startup company and meant for other startups, the Brex Card could be the card that best suits your small business. Read on to learn more about all the card’s benefits and offerings.

What is Brex?

One way Brex differs from other issuers is that it requires no personal guarantee or personal credit check for approval. A line of credit can be approved in a matter of minutes — credit is extended based on the business’s cash flow or sales.

Brex actually issues two cards — one to be paid daily and another monthly. Since the monthly one is most comparable to other credit cards, we’ll mostly that one in this piece.

On the surface, the Brex Card doesn’t look significantly different from other cards. It operates on the Mastercard network and provides rewards on your purchase. It’s also a charge card (not a credit card) as full payments automatically come from your specified account at the end of each month.

But behind the scenes, “we manage everything,” said Marco Mahrus, senior vice president of Business Development at Brex, in a former interview. “We have our own underwriting credit policy. We create our own statements, we process transactions directly and run our own risk management platform.”

Because of that, companies can apply online and, within a few minutes, not only get approved, but are also issued a virtual card that can be used immediately. The company not only issues a solid rewards card, but also provides numerous business tools, so you can easily scale your business and manage transactions.

The Brex Card at a glance

Once approved, the Brex Card instantly issues you a virtual card that you can start spending right away. You can even issue an unlimited number of virtual cards to your company’s employees.

The card provides rewards on your purchases, including 7X points on rideshare, 4X points on Brex Travel, 3X points on restaurants, 3X on eligible Apple purchases through the Brex Rewards Portal, 2X points on recurring software and 1X point on everything else.

As an applicant, you would connect your bank accounts to the company’s software, allowing Brex to see your cash flow and determine your credit limit based on your spending and cash balances. The card also comes with no annual fee or foreign transaction fees.

Earning rewards

Brex also tailors the bonus categories to your industry, depending on the kind of company you identify as in your application. The rewards structure described above, with bonus categories on rideshare, travel, restaurants, recurring software and more, is geared toward tech companies.

If your company is in the life sciences industry, your rewards structure is: 7X points on life science conference tickets, 4X points on travel booked through Brex Travel, 3X points on eligible Apple purchases through the Brex rewards portal, 2X points on lab supplies and 1X point on everything else. Though it may not sound initially worth it to declare your business’s industry, it will definitely make a difference in the long run, especially if you work in life sciences and have a hard time maximizing certain tech categories.

Redeeming rewards

Issuers vary on when they post rewards, sometimes in a few weeks or at the end of a billing cycle. However, Brex openly says they post rewards on transactions usually within two days.

As for redemption options, there’s quite a few: statement credit, cash back, gift cards, cryptocurrency, travel (through the Brex Travel portal) or transfer to airline miles. Some of the most famous international airlines like Aeromexico, Air France KLM, Avianca, Singapore Airlines, Emirates, Asia Miles and Qantas are among the airline partners you can transfer points to.

Keep in mind though that the value of your points varies based on how you redeem them, like many other rewards programs. For the most part, each point is worth 1 cent per point, though it goes down to 0.7 cents per point when redeemed for statement credit.

High credit limit

Perhaps one of the most attractive aspects of the Brex Card is its high credit limit. One of the big advantages of qualifying for the monthly payments Brex Card is that you can qualify for a company credit limit 10 to 20 times higher than a traditional card. Your exact credit limit varies, however, on a regular basis — depending on your cash flow.

You should know as well that your company credit limit is independent from a user credit limit, which you can set individually as the business administrator. The company credit limit and the user limit act differently, but of course, the total sum of all your user limits cannot exceed your overall company limit.

Spend management software

Not only does the Brex Card provide great rewards, it offers a slew of business tools to help you manage expenses and even scale your business.

Brex provides built-in expense software where you can upload your receipts (or text or email them in), and the company will automatically match them up with your statement. The software easily reconciles your expense data, and you can even identify areas to save costs by running custom reports.

To help with automatic reconciliation, Brex also integrates with external accounting and business tools such as QuickBooks, Slack, 1Password, Netsuite and Concur. Plus, Brex reports on-time payments to credit agencies to help your company build credit.

Partner perks

Though the card lacks a welcome bonus right now, it does offer some valuable credits through its partners. One is via Amazon Web Services, which awards $5,000 in credit to all new Brex customers. If you qualify for AWS Activate, you may even be awarded with up to $100,000 in credits.

Other partners with offers are QuickBooks, giving you 30% off your first 12 months, and UPS, saving you up to 50% on each shipment.

Maximizing the Brex Card

To be eligible for the monthly payment Brex Card, your business must be registered in the U.S. as a corporation or other form of non-individual liability company. Your minimum balance to qualify depends on the type of business (e-commerce, small business, etc.), but for startup companies it starts at $50,000 if you have professional investors.

As for maximizing the card, here are some tips so you can best enjoy all that the Brex Card has to offer:

• Be honest about your business industry: Though there’s no reason to lie, being transparent about your industry, whether in tech or life sciences, will only make it easier for you to maximize rewards in bonus categories you will spend on.
• Go about your regular spending: Just like a personal card, a business card only serves you well if you use it on spending you would normally do. Don’t go out of your way to spend on a different category just for the rewards — it’s rarely worth it.
• Take advantage of partner perks: If you’re thinking about setting up a website for your business or using Slack as your corporate messaging app, you should capitalize on the discounts offer by Brex’s partners while you can.
• Remember the high credit limit: If your business is approved for a high credit limit, don’t be afraid to use it. Especially in the early years of a business, it can feel like all you’re doing is buying supplies and subscriptions and trying to break even. That’s when a high credit limit really comes in handy. Just be careful to spend within your means, as always.

Bottom line

The Brex Card is certainly unique, and it has a lot of benefits to offer the right kind of business owner. If you’re looking for a business card that requires no personal guarantee, has competitive rewards and can offer a large credit line, this could be a great choice.